Dubai developers taking risks with stretched payment plans

The trend among many Dubai developers to launch sales offering low upfront payments — typically 5-10 per cent of the property value — and then stretch the rest of after handover could have major consequences for the market, according to the Damac Group’s chief.

Similar concerns have been expressed privately by some in the local property marketplace. But it is rare for the head of a leading developer to voice the very same concerns outside of boardrooms.

“I think the situation with these payment plans is very risky and can create a dangerous scenario.” What’s the guarantee that all of the buyers who take part in the post-handover payment schemes will stay the entire course of the project and meet all their commitments? Even if 30 per cent of buyers fail on these payments, it’s going to cause huge problems for these developers,” said DAMAC Chairman Hussain Sajwani.

Source Credit: Khaleej Times
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