The global financial crisis will likely cool off some of the market frenzy that has driven speculators to buy offplan properties in their droves in recent years, Chris Dommett, the chief executive of mortgage adviser John Charcol Dubai said today. As foreign and local investors are displaying more caution than usual, the offplan market, which has been known to drive up property prices due to speculative buyers and seller, is expected to slow down, said Mr Dommett.
Investors who buy property and quickly resell for a profit, otherwise known as 'flipping', have not only been discouraged by the recent global economic uncertainty, but also by recent Government and regulatory action taken to limit the practice. End users are already less likely to buy offplan as they typically need a place to live or to generate rental income to support mortgage payments, and are often wary of the return of their investment, the company found.
"End users are realising there is very little price differential between offplan and completed properties, and they would prefer to buy something that is ready to move into," said Mr Dommett. "Financing is also generally more difficult for offplan buyers as the banks are increasingly reluctant to lend against a property that has yet to be built." ngillet@thenational.ae
