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Saudi-based Maximiliano Development Management Services (MDMS) said off-plan developments are currently experiencing some of the highest sales levels in the kingdom, notably in residential projects.
A key player in the growing construction industry in Saudi Arabia, MDMS said this was mainly because of the sudden shift among developers and homeowners for off-plan properties owing to its attractiveness as a viable investment option.
Off-plan sales are beneficial for both potential homeowners and property investors. In addition to guaranteed profit, buying off-plan properties are more affordable and flexible than an existing property, said a senior official.
"The owner or investor can negotiate excellent discounts, pay a small deposit with staged payments or purchase the property below the market value," explained Mohammad Afifi, the Business Development Director of MDMS.
"One can expect high returns and capital growth because the owner can resell the property at a high market price even before the property is built or whilst under construction," he stated.
"However, as confidence in the real estate market gradually returns, developers must continue to regain the buyer’s trust and ensure that off-plan projects will be completed in a timely manner and according to pre-agreed specifications," he added.
According to Afifi, trust in the developer and in the market is fundamental for off-plan projects.
"Since stories of poorly treated buyers who have little legal resource and developers who don’t update buyers have occurred in the past, buyers are very cautious now when dealing with off-plan projects," he stated.
"Off-plan sales is vital to the real estate industry because it attracts guaranteed profit so developers must restore the trust of the buyer and be transparent in their transactions to ensure a successful project,” he added.
Afifi pointed out that support from local authorities would also contribute to timely completion of projects.
"Thus, developers would like to see better and faster approvals and no additional charges appearing post design approval such as utility connection charges or interim registration and more expedient default procedures that are actually carried out," he noted.
According to him, MDMS had been working closely with the National Housing Company to develop housing projects for Saudi citizens.
The majority of the development projects have shifted to off-plan sales as a result of the coronavirus pandemic which has greatly affected the real estate market, stated Afifi.
The Murcia project, one of the largest projects in Riyadh, with more than 5,000 housing villas and apartments, was one of MDMS’ key projects, he added.
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