Developer offers buyer options for job loss
Sun & Sand promises repayments and rent-free stays to cover any eventuality
Want to make a property purchase but worried whether you can keep up with the payments because of a sudden change in the job status?
A developer in Dubai wants to ease any such concerns by prospective buyers with an exit scheme. The way it works is fairly straightforward — those buying off-plan into the “SunCity” project at International City can make use of two exit options. One where they get to stay in their apartment for up to three years once the project is completed and units handed over in 2020. They will not need to pay any rent during this period because the downpayments they made up to that point will be counted as rent.
“There is a bit of uncertainty in the job marketplace, which is why some potential end users may not want to commit to property purchases now,” said Sailesh Israni of Sun & Sand Developers, which has completed midrise projects in Silicon Oasis and Industrial City. “Through this exit option, the buyers will not have to worry about continuing their payments if something suddenly happens on the job side and they still want to remain in Dubai. Buyers can make an exit from their payment obligations for genuine reasons.” (A onebed at SunCity will sell for Dh559,000 and a two-bed at Dh739,000. Sales will launch next week.)
The second exit option kicks in when they can reclaim part of the downpayments made until the time of handover. To put this into effect, the property will be rented out directly by the developer and the funds received will then be passed on to the buyer over a three-year term. (This will be minus the service charges.)
According to Israni, “As a developer we are willing to compensate the buyer up to a sizeable percentage of his/her down payment if he wishes to stop his commitments for verifiable reasons. What we are trying to do is assure buyers that we are covering most of their risks.” (As per the current law, if a developer has completed more than 80 per cent of a project, he needs to pay back only 40 per cent of the sale value.)
Shift in trend
Local developers are gradually moving away from thinking of stretched posthandover payment plans as the only way to sell in this market. Right through 2017, it did seem as if this was the only to sustain off-plan sales. But it had come to a situation where even first-time developers were willing to extend post-handover terms to well over seven years.
Thankfully, this over-emphasis on post-handover plans has eased up considerably this year. Instead, those developers who can afford to do so are offering more immediate cost incentives. Developers have been offering waivers/discounts on registration charges, while Damac has one campaign in which it promises no service charges for a 10-year stretch at one of its projects. Clearly, the market is getting serious about what it has to offer and the promotions that go along with them.