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UAE should be concerned about property flipping, says Emaar chairman

the Emaar chairman, Mohammed Alabbar, has warned about off-plan sales as the Government and other developers take steps to reduce speculation on property prices.

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Topic Emaar

“We need to learn from the mistakes of the past,” Mr Alabbar said at Emaar’s annual general meeting last week in Dubai. “We need to be concerned about flipping.”

Flipping was in part blamed for the extent of the housing market crisis in 2008 – when speculators bought unfinished properties and sold them on to third parties within a short time, inflating property prices.

Mr Alabbar’s comments followed news that the Abu Dhabi-based Aldar has introduced resale restrictions on new properties, designed to curb speculative flipping. Buyers must now pay 50 per cent of the property’s value before they can sell it on.

The Central Bank has introduced caps on the amount individuals may borrow to finance the purchase of houses for the first time in the country’s history. Home loans have been capped at between 60 per cent and 80 per cent of a property’s value, while loans on unfinished properties have been capped at 50 per cent.

Property experts warned against generous payment plans that allow buyers to defer paying the bulk of the cost of a new home until years after completion, in some cases.

“Can you stop it? No.” Mr Alabbar said about flipping. “We try to minimise it.”

 

Read more: http://www.thenational.ae/business/industry-insights/property/uae-should-be-concerned-about-property-flipping-

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