Dubai realtors woo buyers
with tempting finance schemes
By Aroonim Bhuyan
Nov 19 (IANS) With banks curbing loans in the face of the
global financial crisis and real estate agents finding it
difficult to get customers, property developers in this West
Asian metropolis are wooing potential home buyers with lucrative
like Emaar, Union Properties (UP) and ETA Star are offering
innovative payment schemes like rent-to-own to long-term payment
plan after handover even as a new survey found that over 50
percent of real estate agents in Dubai could not conclude
a single deal in the last one month.
Dubai-based UP has become the latest to offer flexible payment
options like renting, owning and renting to own in some of
its select properties here.
initially introduced the rent-to-own scheme over four years
ago to support the sales at the first Green Community project,"
UP's chief property officer Lesley Sayle said while announcing
the relaunching of the scheme.
was a plan that was successful and by reintroducing the rent-to-own
scheme, we are giving residents and businesses the flexibility
to plan for their homes and office space," she added.
the scheme, a customer can rent a property in a select UP
project for one to two years. Then, if the client decides
to buy the property, the rent for the one or two years that
has been paid is converted into a down payment followed by
a regular instalment payment plan.
to Sayle, around 98 percent of UP's rent-to-own tenants have
converted their option and become owners.
Sayle said her company has not relaunched the scheme because
of cancellations or mortgage defaults, the fact remains that
the scheme may very well tempt investors still seeking property
in Dubai after banks cut down home loan amounts up to 50-60
percent of the total property value.
week, one of the United Arab Emirates' (UAE) top developers,
Emaar Properties that has major investments in India, too
came up with a similar scheme with two options - 'Plan-to-Own'
the 'Plan-to-Own' option, a buyer can have the flexibility
to pay 25 percent of the property price after the handover
and over five years.
would make it possible to bridge the current gap due to lower
loan to value ratios offered by banks and financial institutions,
according to the company.
will help potential home owners and commercial customers who
can qualify for a mortgage through a bank to bridge the gap
by extending their payment plans.
extended payment plan of up to 25 percent of the property
value will be paid back by the customer in single annual instalments
for five years, with the first payment beginning only one
year after possession.
the 'Rent-to-Own' option, buyers can first rent a property
in one of Emaar's upscale projects and then decide whether
to purchase it.
can adjust 100 percent of the first year's rents as home finance
if they decide to purchase the property within 10 months of
living in the home, Emaar stated while announcing the new
property price will remain fixed for a period of one year,
and customers will also have the option of acquiring the 'Plan-to-Own'
programme if they decide to buy.
the rent period, tenants will have the first right to buy
the property and those who do not wish to buy can still have
the option of renewing the tenancy.
'Plan-to-Own' and 'Rent-to-Own' programmes are aimed at further
strengthening the property sector by facilitating easier purchases
and making property more affordable for our customers,"
Emaar's chief executve Issam Galadari said.
providing customers the option of securing up to 25 percent
extended payment option, Emaar is stepping in to support our
customers," he said.
ETA Star Property Developers, part of the ETA-Ascon Star Group,
is making plans to offer tailor-made payment plans for customers
of its properties.
hold on to some units in our projects, which we generally
sell on completion," Shyam Sunder, general manager for
marketing at ETA Star, told the Emirates Business 24-7 daily.
this time around we are open on offering easy payment terms
We will sit across with them and work out a solution that
benefits both of us," he said.
companies are coming up with these plans even as a new survey
by a real estate website said property agents here believe
the fall in demand for property was due to bank curbs on loans.
the same time, they believe the property market here will
pick up in six months.
survey revealed that 77 percent of Dubai real estate agents
believe the market will pick up within six months. This is
surprising given that more than 50 percent of respondents
have concluded no sales at all in the last month," said
Paul Allen, webmaster of TheEstateAgentsDubai.com that conducted
agents believe the lack of lending from banks and a self-perpetuating
panic are chiefly responsible for the current situation,"
to Allen, other reasons like the need for more regulation
by the Real Estate Regulatory Authority, clear information
regarding new laws and procedures from the Land Department,
the global financial crisis, the end of the perceived Dubai
property bubble and an uneducated market have also led to
the fall in property demand.
months ago, it was possible to obtain 80-85 percent mortgages
on property, now many banks are down to 50-60 percent and
agents feel this has caused a seizure in the market,"