Sorouh draws up new property payment plans

Abu Dhabi real estate company considers 'rent to own' scheme in wake of economic downturn.
Sorouh draws up new property payment plans
By Joanna Hartley
Tue 24 Feb 2009 04:06 PM

An overhaul of payment schemes making it easier for people to buy new homes is being explored by Abu Dhabi’s second largest property developer, Sorouh Real Estate, it was reported on Tuesday.

The company said plans could include a “rent to own” financing scheme, which would see rental contributions going towards the cost of the down payment for the apartment, according to UAE daily The National.

“We are making sure we are structured to handle the market as it changes,” said Simon Cunningham the company’s new executive director of sales and marketing.

“The market is shifting from speculators to investors to home owners. The big emphasis is helping customers find financing,” he added.

The announcement comes after other UAE real estate companies announced changes to their financing plans to encourage people to buy amid a downturn in sales, due to the global financial crisis that has led banks to stop lending.

Emaar Properties has also started helping would-be owners with down payments and offering “rent to own” plans.

Meanwhile, Deyaar launched the Deyaar Easy Payment Programme earlier this month.

Under the scheme, owners who cannot afford the 10 percent down-payment on their respective properties can pay four tranches worth 2.5 percent each.

It was unclear how long buyers will have to make the payments.

“You get a lot of commitment and this strategy costs us a lot of money – we’re talking about hundreds of millions. We are willing to give this to our clients but we need a little in return; we need at least a 2.5 percent commitment,” said Deyaar’s CEO Markus Giebel.

Last year, several of the major developers and financial institutions, including Sorouh, created a new home finance provider called Abu Dhabi Finance, with S$136.1m of paid up capital.

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