Emaar Properties, the largest developer in the UAE by market value, says it will ease payment procedures for buyers to counteract slowing property sales. Other developers across the country are also considering adjusting payment plans as buyers find it increasingly difficult to finance their purchases. Many properties were bought by speculators who hoped to profit from the hitherto robust housing market by selling before paying more than the initial downpayment. However, buyers are now struggling to raise loans as banks tighten lending criteria in the wake of the world financial turmoil, and as a result many overstretched sellers could default.
"The... programmes are aimed at further strengthening the property sector by facilitating easier purchases and making property more affordable for our customers," said Issam Galadari, the chief executive of Emaar. The Emaar plan includes two new options. Under the "Plan to Own" scheme, Emaar will provide a 25 per cent "bridge loan" to help buyers afford downpayments required by home finance providers. The buyer would then pay back the loan over five years.
The second option, the "Rent to Own" programme, will allow tenants to contribute 100 per cent of their rental payments for a year towards buying the property if they decide to purchase it within 10 months of living in it. Emaar itself is under pressure to increase cash flow. Within the past few months, prices in its signature Downtown Burj Dubai project have fallen by an average of 22 per cent, according to property brokers.