Focus must be to Attract First Time Buyers

DUBAI, UAE, October 1, 2014 /PRNewswire/ --

Following the Q2 Report released by MENA Properties Advisory Team, CEO Michael Michael turned his attention to the long term demands of the real estate market by stating that an immediate focus on providing solutions for first time buyers is required. "There are a number of expatriates (in particular) who live in Dubai and want to cement a future for themselves and their families by investing in bricks and mortar, but find it challenging due to the accumulative costs of buying a home."

"The emphasis needs to be on affordable housing," he continued. In Abu Dhabi, Tasweek recently announced plans to launch its affordable housing project by the end of the year, a step which is certainly seen as a promising one for end users. "Tasweek sees the demand for such a requirement and is taking a decision to fill that gap, one that will be welcomed among many," he went on. "Launches are fantastic and can help the growth of the Dubai real estate market, but there must be an emphasis on affordable housing, and with them, affordable payment plans. We need to keep the professional expats in Dubai, and as costs of education and healthcare may rise, owning a property becomes more challenging. Salaries aren't seen to be increasing so we have to find solutions for the long term loyalists of Dubai."

With transfer fees at 4% (plus 2% agent fees) and mortgage LTV's capped at 75% (excluding application fees, processing fees and other), first time buyers will find it difficult to get on the property ladder. Whilst prices are beginning to soften, first time buyers are still struggling. Michael believes that it is important to differentiate the real end users from the investors and suggests that rules must be implemented separately for each, as opposed to one rule for all.

According to Michael, there are a number of possible solutions (for first time buyers) and restrictions which can be implemented to control the sale of first time real estate

1. Transfer fees paid by the mortgage provider, consolidated in the loan, but not calculated against the LTV (thus reducing the initial outlay).  
2. Fixed reduced bank profit rates (for 3 years) along with waived bank charges in order to make the move more affordable.  
3. No purchases / sales by way of Power Of Attorney
4. No Ejari registrations for connections of utilities in the name of a third party
5. Title deed history registered in the DLD, commitment to own for 3 years before transferring ownership.

"The list goes on," he continued. "We can do this and ensure our investors maintain their appetites and our residents have the security they desire for the long term."

Michael continued by suggesting that transfer fees should be higher if a sale is made within a short space of time of ownership. For example, selling a property within the first year would result in a 6% transfer fee, whereas those wishing to sell after 3 years may only have to pay 2%. "This will continue to make the market an attractive one for investors but also for end users," and he reemphasized the need to differentiate an investor from an end user. "Recent market reports have demonstrated a slowdown in pricing, and whilst there are no signs of a bubble, the need for achieving the long term vision must be implemented sooner rather than later."

MENA Properties is an independent sales and brokerage company for residential and commercial properties in the primary and secondary markets of the UAE, incorporated under UAE law and regulated by Dubai Government legislation.

http://www.mena-properties.com