Af­ford­abil­ity key for prop­erty sec­tor

7 Days in Dubai - - BUSINESS - @ThatPad­dyRyan

Large down­pay­ments on mort­gages are the big­gest ob­sta­cle to the Dubai prop­erty mar­ket reach­ing its po­ten­tial.

That’s ac­cord­ing to one of the lead­ing fig­ures in the city’s real es­tate mar­ket.

“We had a sur­vey of 2,000 peo­ple and this was by some dis­tance the main dif­fi­culty when it comes to get­ting fi­nance,” said , David God­chaux, CEO of Core, which is a UAE as­so­ciate of Sav­ills.

God­chaux said that wouldbe buy­ers are ex­pected to fork out de­posits of be­tween 24 and 32 per cent be­fore be­ing able to ob­tain fi­nance to buy their own homes.

He pre­dicted this will be­come more of a prob­lem as the ma­jor­ity of new prop­er­ties be­ing built in Dubai will be aimed at the main­stream/af­ford­able sec­tor in­stead of the prime mar­ket – prop­er­ties cost­ing above Dhs1.4 mil­lion.

God­chaux was speak­ing to 7DAYS fol­low­ing the pub­li­ca­tion of Core’s re­port “Cap­i­tal­is­ing On A Bot­tom­ing Mar­ket: An In­vest­ment Guide”.

The re­port pre­dicts that 81 per cent of the new builds in Dubai next year will be aimed at By Pa­trick Ryan the main­stream/af­ford­able mar­ket, a fig­ure that would pre­vi­ously have been un­think­able given how syn­ony­mous the city is with the lux­ury sec­tor.

“We have never seen such a sce­nario,” said God­chaux.

“We are def­i­nitely wit­ness­ing a shift to­wards af­ford­abil­ity but there are very hefty down pay­ments re­quired.

“Prime com­mu­ni­ties, like The Palm, don’t have much more stock that can be built there.

“That’s why we’re bullish about those ar­eas main­tain­ing their prices, there’s only so much stock that can be built in one area.

“De­vel­op­ers are used to peo­ple be­ing able to af­ford to pay to­tally in cash.

‘That’s not go­ing to be the case when you start go­ing into the af­ford­able sec­tor.

“The banks will come un­der pres­sure from po­ten­tial buy­ers as well as prop­erty de­vel­op­ers keen to move their stock.”

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