Better protection needed for international real estate buyers in the Gulf region, poll showsWednesday, July 28, 2010
International buyers who invest in real estate in the Gulf region should be better protected, according to a new survey.
More than 70% of people think additional protection measures would help inspire more confidence in the region’s property markets, the poll for Arabian Business shows.
Only 2.2% of people said current regulations were sufficient, while 16.8% said it was up to individuals to do their own due diligence.
A further 7.3% of those who took part in the poll warned new laws would lead to the return of speculators to the market and artificially inflated real estate prices.
At the moment, the only option for investors of a stalled or cancelled project is the civil courts, which have seen an increase in disputes in the wake of the global financial crisis.
Steps to address the uncertainty facing investors have already been taken in the United Arab Emirates with the introduction of the Strata Law last month, and a new scheme that offers Dubai investors and developers a ‘government guarantee’.
The Land Department’s Tayseer scheme, announced at the start of July, covers 40 projects in the emirate and effectively guarantees their finance and completion. The scheme’s first phase covers projects which are under construction or almost finished, including developments in Business Bay, Dubai Marina and Jumeirah Lake Towers.
Some companies are also looking at ways to help property investors who have lost out as prices in places like Dubai have plunged 50% since their peak at the end of 2008. The Smith and Ken agency has launched a service to help investors of off plan property recover the value of their purchases.
It says its Real Estate Recovery Scheme works via a like for like credit note to the value of what they have already paid against one of its properties.
‘There is always an element of risk involved when investing in off shore development plans even though you do a thorough background check on the developer and the property. There are situations that are beyond one’s control like worldwide economic challenges or the developer going bust,’ said Benjamin Smith, the company’s chief executive officer.
‘Our Real Estate Recovery Scheme (RERS) aims to help investors in such unfortunate circumstances. Whether they have put down a 10% deposit on the property or paid up a larger percentage, we will help them to recover their money by swapping units in most delayed or cancelled developments for thriving completed properties in prime UAE and international locations,’ he explained.
Once an application for RERS is approved by Smith and Ken, the company invites the investor to choose a new property, and once it is done, Smith and Ken deducts the amount the investor has already paid from their new apartment, office space or plot of land.
‘Apart from more financing options and government regulations, innovative schemes like RERS are key to a recovery in the property market,’ Smith added.Source: [Property Wire News]