Andrew Day’s heart was pounding, his hands sweaty as they grasped a bank cheque writing away the life savings of both he and his wife. Sitting opposite, a real estate agent dangled keys to a three-bedroom apartment on the Palm.
“It was a bit scary,” Day tells Arabian Business.
“We could see the keys in his hand. The money was in mine and it was quite literally [a matter of] swapping the two.
“The land department guy disappeared for half an hour. Forty-five minutes later - purely because of the traffic - we were in our new house; it’s that simple, it’s done.”
Buying his first property had taken Day all but a few hours – enough time to flash a cheque and bargain down the price by AED300,000 to AED1.7m ($463,000).
But rewind two years and the long-term Dubai expat’s attempt to purchase a home was not so simple. Armed with only a bank’s pre-approval for a mortgage, Day was persistently thwarted by an endless chain of buyers sporting cash.
“It quickly became apparent that the bank’s backing was not enough,” he says.
“We went to see lots of places but we got the pretty strong impression that turning up with a mortgage meant we were treated like a second-class citizen. They transferred you to some bloke that had nothing better to do. You’re basically wasting their time.
“But if you have cash, a top agent will turn up to meet you.”
Cash accounts for 70-80 percent of property transactions in Dubai, according to the industry. That equates to $30-33 billion in real money splashed across the emirate last year.
Sam Wani, general manager of mortgage adviser Independent Finance, says the level of cash payments in Dubai real estate is extraordinary compared to the rest of the world.
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