Flexible payment plan can help real estate bounce back - official |
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Saturday, Nov 15, 2008
Gulf News
Dubai: Smart marketing, including attractive payment schemes, could help developers come out of the current real estate slump, officials say.
"The market is now adjusting itself while there is a liquidity crunch. The banks are tightening lending rules," Peter Penhall, CEO of Gowealthy.com, told Gulf News on Thursday.
"Since there is a liquidity shortage and banks are reducing mortgages, it is important to offer flexible payment terms to end-users so that they are not forced to seek bank loans or mortage finance.
"Good price, a great payment plan that helps end-users to buy properties without seeking finance and a good product, are the three key elements that will help good developers to over come the current slump."
Gowealthy.com is a full service property brokerage, leasing and rental management firm, having 70 sales professionals split in six offices. Established in 1999 in Hong Hong, the company moved its base to Dubai in 2002 - at a time when the government opened up Dubai's real estate market for foreign ownership.
Successful campaign
The company recently launched a successful sales campaign for Axis Residences at the Dubai Silicon OasisDubai Silicon Oasis
, being developed by GGICOGGICO - a publicly listed company.
"We released 657 units allowing the buyers to make payments in 100 monthly installments with the first three per cent to be paid while booking with a two-month gap," Penhall says.
"We have lowered the price from Dh1,500 per square foot to Dh1,450 for the buyers. A buyer could buy a one-bedroom apartment, for example, for Dh9,500 per month. He can move into the house upon delivery in June 2010, while having paid only 20 per cent and get full rental on 100 per cent.
"Now that the speculators have left the market, sales have nearly stopped, bringing down property prices to a level that is becoming more attractive to the end-users. It is important for developers and brokers to come up with smart and attractive payment plans," Penhall said.
"What we see in the market is a correction happening. Property prices jumped 40 per cent during the first quarter this year, followed by another 20 per cent. A 60 per cent jump in property prices in six month couldn't be sustained."
He said developers can no longer launch projects with a hope that they can build it simply with sales proceeds.
© Gulf News 2008. All rights reserved.
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