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Discuss this article (12 Comments)Developers need to act to ease mortgage crisis - Damac chief
by This email address is being protected from spam bots, you need Javascript enabled to view it on Sunday, 14 June 2009
zoomFUNDS CALL: Damac's chairman says more needs to be done to help investors access mortgages amid the global credit crunch. (ITP Images)
Developers need to do more to give their customers access to mortgages amid the impact of the global economic crisis, a leading UAE property company said on Sunday.
Hussain Sajwani, chairman of Damac Properties, said development firms needed to "again facilitate the flow of funds, to re-activate those investors who have lost confidence".
He added that the lack of availability of mortgages lay at the core of the UAE's slowdown in the real estate market.
Related: Fighting back
"We need to take a cue from the consumer goods industry which has traditionally tied up with financial institutions and banks to boost sales – from television sets to home theatre systems that are made available on easy finance options," he said.
"Yes, real estate is a different industry and striking such partnerships will not be easy, but are necessary," Sajwani added.
He said the first and most basic step for a developer was to work on strengthening its profile with banks.
"While it is right that irresponsible mortgage lending should be discouraged, extremely tight and unjustified policies will do no good. Proper policies need to be crafted and we as developers can work along with the banks to develop customized policies," he said.
"There is no one single solution, both the banks and developers want to be in business and the only way is to adopt a joint approach in re-instilling confidence. It is a critical for the recovery of the real estate volumes.
"Many developers demonstrated such capabilities when the times were good. However it is now vitally important to continue and demonstrate such capabilities today. The rebound of the property sector largely rests on the recovery of investor confidence, primarily driven by banking confidence.
"We have to move forward and solve this. It is imperative for developers to facilitate mortgage availability and financing packages for investors and buyers and make purchasing real estate a viable option for the masses once again."
READERS' COMMENTS
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Developers mortification
Posted by Re.N.U.,LLC on Friday 17 July 2009 at 00:05 UAE time
Where is the mortification for developers? With this being a short-term loan and property not selling and developers unable to continue pumping funds into these projects the result is a bank forclosure and an unfinish project sitting.
Posted by Re.N.U.,LLC on Friday 17 July 2009 at 00:05 UAE time
Where is the mortification for developers? With this being a short-term loan and property not selling and developers unable to continue pumping funds into these projects the result is a bank forclosure and an unfinish project sitting.
Stable Policies more important
Posted by Property Guru, Dubai, UAE on Tuesday 16 June 2009 at 10:18 UAE time
While the mortgage is an important aspect, currently the inconsistent and non-visionery visa policies are making property owners more nervous than absense of mortgage.
Banks were over exposed. They are doing the ratio balancing. The moment they are comfortable, they will and have to lend.
But how can you lend when your borrower is due to exit the country every six months.
Posted by Property Guru, Dubai, UAE on Tuesday 16 June 2009 at 10:18 UAE time
While the mortgage is an important aspect, currently the inconsistent and non-visionery visa policies are making property owners more nervous than absense of mortgage.
Banks were over exposed. They are doing the ratio balancing. The moment they are comfortable, they will and have to lend.
But how can you lend when your borrower is due to exit the country every six months.
realistic real estate and commitments
Posted by danny-m, dubai, uae on Monday 15 June 2009 at 00:31 UAE time
think, what is the right price ? and what was market prices ? how is it possible prices could not crash ? what do the govt lose to give visa against property,! also after charging regular fees, dont they understand any one lives anywhere gives something to the place where they lives.
Posted by danny-m, dubai, uae on Monday 15 June 2009 at 00:31 UAE time
think, what is the right price ? and what was market prices ? how is it possible prices could not crash ? what do the govt lose to give visa against property,! also after charging regular fees, dont they understand any one lives anywhere gives something to the place where they lives.
Go Back to Basics
Posted by AVH on Monday 15 June 2009 at 00:19 UAE time
Well sir, banks are businesses like any other, and looking to profit. With defaults piling up, they cannot be expected to continue pumping in unlimited sums of money to support developments. Forget about investor confidence. Try to look at the basics. Here's something to start off with:
1. Please differenciate between investors and users. Properties are NOT shares traded by investors on the stock market though that is unfortunately what was happening so far and what caused the unreal prices. Properties are homes and/or offices where users (and that means human beings) live in, rear kids in or work in.
2. Identify your customers and understand their needs. Does your average target customer drive a Bentley (not the ones you were once giving away!!) or a Nissan? What are they looking for in a property? What are their immediate and long-term needs and concerns? Are you able to address those? Take your customers and their requirements seriously if you as a company want to be taken seriously.
3. Make sustainable units that are built to last long. What use is a 99-year lease if the expected operational life of the building is less than a quarter of that time??!!
This is not about banks or lending. Banks will automatically start to lend if they smell some profit coming their way. Focus on your customers first and see what they need. And good luck.
Posted by AVH on Monday 15 June 2009 at 00:19 UAE time
Well sir, banks are businesses like any other, and looking to profit. With defaults piling up, they cannot be expected to continue pumping in unlimited sums of money to support developments. Forget about investor confidence. Try to look at the basics. Here's something to start off with:
1. Please differenciate between investors and users. Properties are NOT shares traded by investors on the stock market though that is unfortunately what was happening so far and what caused the unreal prices. Properties are homes and/or offices where users (and that means human beings) live in, rear kids in or work in.
2. Identify your customers and understand their needs. Does your average target customer drive a Bentley (not the ones you were once giving away!!) or a Nissan? What are they looking for in a property? What are their immediate and long-term needs and concerns? Are you able to address those? Take your customers and their requirements seriously if you as a company want to be taken seriously.
3. Make sustainable units that are built to last long. What use is a 99-year lease if the expected operational life of the building is less than a quarter of that time??!!
This is not about banks or lending. Banks will automatically start to lend if they smell some profit coming their way. Focus on your customers first and see what they need. And good luck.
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