No payment defaults on Dubai luxury units |
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Dubai is not witnessing payment defaults on high-end properties by buyers, according to the Real Estate Regulatory Agency (Rera).
"Every project on the ground and under construction would be completed. Master developers are intact and the high-end third party developers may find alternatives to carry on with their projects through bulk selling of units to private equity funds and hedge funds," Marwan bin Ghalita, Chief Executive Officer, Rera, told Emirates Business.
"We recently saw a sales transaction for a Dh24 million property. Ultimately, the fate of a luxury property will depend on the affordability of a buyer."
Ghalita said lending in the market would have to be eased in order for real estate buying to increase and gain momentum.
He told Reuters that developers should review their projects that had not yet been launched, or where only a few units had been sold.
"This is not a good time to start a new project if you don't have enough liquidity to construct. Slowing down is very important and this is what we at Rera asked the developers to do about a year back. Slowdown and review is very important for the real estate market," he said.
Prices for "affordable" off-plan properties could pick up in the second quarter of 2009 if banks increase lending, he said.
Ghalita said Rera would enforce a law on the registration of off-plan property sales.
Rules for time shares were also being finalised.
"People will be selective in where they put their money. It's not like before where people came to buy anywhere," he said.
By Anjana Kumar
© Emirates Business 24/7 2008
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This is good news that there are not any defaults on luxury units. But that may be becuase even though millionaires might have lost money but they still are rich enough not to have to default. But those who are less fortunate than them would face problems for paying up on prior commitments.
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