Flippers

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Dalamar
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Flippers

Mensajepor Dalamar » 29 Ene 2013 13:52

Emaar Properties, one of the largest developers in the UAE, has moved to reduce the practice by including a clause in contracts for apartments in its new residential project, The Address Fountain Views, in Downtown Dubai that prevents a property from being transferred into another name until a certain percentage of the total value has been paid to the company.

Brokers told Arabian Business the percentage was 30-40 percent, depending on the value of the apartment.

Emaar confirmed the policy but would not comment on the details.

"These policies are aimed at discouraging 'flipping' to sustain the robust growth of Dubai's real estate sector,” a spokesperson for Emaar said.

"As pioneers in developing master-planned communities in Dubai, and having handed over more than 31,000 residences, our focus is on encouraging long-term investors in our projects.”

Banks also want to cap the loan-to-value ratio of mortgages on off-plan properties at 50 percent, compared to 75-80 percent on completed properties, Emirates Banks Association chairman Abdul Aziz Al Ghurair said on Sunday.

Al Ghurair said banks could not identify speculators but they would make it harder for flipping to occur.

“Real estate developers like flippers because they make money; if you ask the banks we like genuine buyers who use it for his own home, that’s what will really stabilise society, [when] everybody has a house,” Al Ghurair said.

“Flippers, when they make money, is at the cost of the ultimate buyer.

“You cannot stop it completely [but]... we [will] ask them to put more money on the table. By putting 50 percent on the table it will limit the ability to leverage the bank’s money.”

Priyesh Patel, from Aston Pearl Real Estate, said the industry needed tougher regulation against flipping, but it was difficult to enforce.

Speculators already flouted rules set by Dubai’s Real Estate Regulatory Agency (RERA) by creating power of attorney documents that gave the rights to a property to the buyer.

Patel said the arrangement, which was legal, allowed the buyer to change contact details with the property developer, however the contract could not be transferred into their name until the developer’s required deposit had been paid.

That put the buyer at risk because they did not have legal ownership of the property and it could potentially be repeatedly “sold”.

Patel said the deals were usually done between investors who knew each other, but there were countless examples of buyers being burnt.

Despite Emaar’s attempt to prevent flipping, Patel said those who bought properties off-plan could still on-sell, including changing the owner’s name before the contract was completed, which usually took a week after signing the reservation form.

Patel said while the practice needed to be stopped, it was difficult for authorities to ban it.

“RERA has done everything they can,” Patel said. “You can’t stop someone selling what they own.”

While the regulations had not completely stamped out flipping, it had reduced the number of times a property was on-sold before it was completed, from four to five times during the boom years to about once, Patel said.

Green said any move to reduce flipping was “a good idea”. “It would limit speculation,” he said.

“[Flipping] facilitates rapid growth because people are looking to make very short-term gains instead of actually coming in and investing in the market long-term.”
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Dalamar
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Re: Flippers

Mensajepor Dalamar » 31 Jul 2013 05:53

http://www.arabianbusiness.com/imf-warn ... 11824.html

"The economy and the property market are now recovering, but so strongly that the IMF worries another bubble could form - and because Dubai's debt has continued to rise, it might have difficulty coping with fresh instability.

Harald Finger, IMF mission chief to the United Arab Emirates, noted that by one commercial bank's estimate, listed Dubai property prices soared 35 percent from a year ago in June."
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