Developer to offer buyers lower prices

Nathalie Gillet

• Last Updated: February 09. 2009 8:11PM UAE / February 9. 2009 4:11PM GMT

A rendition of Bloom Gardens, currently under construction: the developers will let buyers renegotiate the price they paid, to reflect falling building costs. Courtesy Bloom Properties

Bloom Properties, an Abu Dhabi based property developer, says it will go back to buyers in one of its key projects and offer them a lower price to reflect falling construction costs.

Property prices in the capital have surged over the last couple of years and buyers paid as as much as Dh3,000 (US$816) per sq ft during the boom, but brokers say more than 80 per cent of buyers were speculators who cannot afford their properties’ full price.

Many had intended to sell the properties before taking possesion of them, but as market conditions deteriorated and new buyers stayed away, found themselves burdened with repayments they could not afford.

“We are going back to the existing buyers in Bloom Gardens in Abu Dhabi with the revised prices and payment plans,” Hani Shammah, the chief executive of Bloom properties said. “This is not taboo for us. We have revisited the prices in line with the construction costs. We are passing on the declining construction costs to the end-user.”

This is one of the first instances since the market began its decline late last year, in which a developer has said it would revisit prices of sold properties.

Bloom Gardens is located on the Abu Dhabi Eastern Corniche and features 640 villas, townhouses and apartments.

“There has been a lot of roundtable discussions [among developers] on how they keep existing investors in projects,” said Vincent Easton, the sales director of the property brokerage Sherwoods.

“There is only a few mechanisms you can use for that. One is financing which is very difficult at the moment. One is revised payment terms. It is a good move. It shows the intention of the developer to continue to build and should inject confidence.



ngillet@thenational.ae