A top UAE developer has said investors who fall for deals that sound too good to be true have only themselves to blame for not doing their homework right.
Extremely extended plans, beyond belief discounts and promises of guaranteed savings are among the sales pitches developers in Dubai are using to entice customers into purchasing a property in the emirate amidst ongoing subdued market conditions that have persisted since the oil prices plunged in 2014.
With a platter of discounted properties on offer not just at Cityscape but all year round, Saeed Al Qatami, CEO of Deyaar Development insists that buyers need to be sensible and study a developer’s track record.
“See, today you have to put your feet on the ground and be realistic about everything,” Al Qatami told Arabian Business in an interview at Cityscape on Wednesday.
“So the first thing is: Is this going to happen? Is this reliable? You want to give your money to someone who is going to deliver.
“If somebody is going to show me wow, amazing pictures, amazing photos, amazing payment plans, AED1.7 million discount or I don’t know what other sort of gimmicks, and at the end of the day it doesn’t get delivered, (then) I don’t blame that developer. I blame the investor who bought it.”
Al Qatami was commenting in reference to an SMS advert he was asked about by Arabian Business that offered “reduced prices” that offered buyers an opportunity to “save” AED1.7 million on a three-bedroom property.
He added that exaggerated discounts or savings promises just meant that the property was “overpriced”.
“Those are marketing gimmicks that they do,” he said.
In other tactics, one offered savings of AED400,000 on a studio – dropping the price from about AED1.33 million to AED850,000. Another provided the option pay 80 percent five years post-handover along with a five year-service fee waiver.
Reliability, location
Asked if gimmicks and incredible payment plans were the only way for developers to fiercely compete in the current macroeconomic climate and tough lending conditions, he said: “I think for the timing, yes. That’s why also the developers are coming up with different products of five years or four years post-handover, or even eight or six (years), so you will see a lot of those things just to facilitate to move their products.”
The CEO stressed that investors need to be “well educated and aware”.
“Reliability first, location as well is very important, and also the quality that developers deliver,” he advised.
“If you see that someone has (previously) delivered a very lousy (project), why would you want to go for those products? So investors need to do their homework and go to the trustworthy developers (and) put your money there.
“Don’t go tomorrow and say ‘oh no I was fooled by this’. Don’t do this. Understand, is there infrastructure there? Is there the things that will make me live in a right, easy way? Am I going to drive another 30 minutes to reach to a supermarket?”
Challenging year
The CEO said slowdown in sales was not a new situation.
“Definitely sales has been challenging not just this year 2018, but I think from the second half of 2016,” he said. “But Deyaar is different because we don’t have so many products. For example, 88% to 90% of our Midtown project is sold, so I can’t really ask my sales team to do more.”
Esam Hasan Saleh, Executive Director of Business Development and Sales, Jumeirah Golf Estates, added that while prices and competitive offers are a response to market conditions, it is only one element in the evaluation process.
“There are also other elements like delivery on time, like quality,” he told Arabian Business, adding that developers must compete for “the best interest of the buyer”.
Despite challenging conditions, Saleh added that he felt positive about the state of Dubai’s real estate market because of the Dubai Land Department’s continued efforts towards “keeping this real estate market in the best shape that it can be”.
“We feel very optimistic and we feel that the market is going very well. We’re confident about the real estate market of Dubai and we feel everything is ok,” he said.
He added that the Land Department’s “correct valuation of the sites and projects” has helped instil confidence among both buyers and developers.
“They don’t issue any kind of percentage of completion before it’s really thoroughly checked out so this gives the market confidence and assurance to the end users,” he explained.
“It’s very professional (and) to the best interest of the market.”
Al Qatami added that while the competition is “intense”, developers must accept that “it’s always going to be intense”.
“When you have so many players in any market, definitely there’s competition.”
Earlier this week the Marwan Ahmed Bin Ghalita, CEO of the Real Estate Regulatory Agency (RERA) – the regulatory arm of Dubai Land Department – warned developers to deliver on what they promise and maintain the trust that the market has built.
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