Words: Ashley Rigg
Published: 14th December 2009
Could matchmaking idea help overseas property industry?
A
successful new initiative in the UAE which matches investors who have lost money on cancelled projects with “approved” developers could offer profitable opportunities for international developers in other countries, if the political will could be found to implement similar schemes.
The initiative which is operating in Ajman, the smallest of the UAE’s seven emirates allows investors to transfer deposits and stage payments from cancelled or delayed projects to properties from “approved” developers in the form of discounts.
Developers benefit from acquiring business they may not otherwise have secured and investors have the opportunity to “cash-in” on their investments which may otherwise have been written off.
"What we're doing is matchmaking. We allow investors who have lost money from developers who aren't able and offered them the choice to transfer to a certified credited project," Omar Al Barguthi, director-general of Ajman Real Estate Regulatory Authority (ARRA), told Gulf News recently.
"We look at projects which are undergoing progress, ask them to make a proposal for ARRA and let us know what rates they can provide to any potential customer who is transferring. Then we ask the customer whose project is not happening if they want to take up the offer," Al Barguthi explained.
Improving the market
ARRA, the government body which runs the scheme, insists participating developers must fulfill 16 requirements which include commitments to complete projects against certain timescales. Targets are reviewed each month and if a developer fails to meet the criteria for some time their registration is cancelled.
Analysts in the UAE say the initiative is a good example of how government authorities can intervene in a country’s housing market to help the industry move forward.
Could it work in Spain?
The obvious question is could something similar work in other overseas property destinations like Spain? There are plenty of developers in need of more business and investors in projects by Trampolin Hills, Nozar, Llanera, Martinsa Fadesa, Habitat, Tremón, Aifos, Constructora Pedralbes, Edisan, Obrum, DHO and Begar,
who are now all in administration, would provide a potential customer base.
Unfortunately, Spain does not share the same political advantages as Ajman. The emirate’s small size and autocratic government style make such schemes relatively quick and easy to implement. Given that Spain’s government
cannot even get some of the basics right when it comes to helping the housing market, it seems unlikely. Shame, it’s a great idea in theory.
User Comments
We tried this 5 months ago with a lot of clients from Spain and overall they were very sceptical because of the heartache they had already been through. Most of them were resigned to 'walking away and losing their deposits' rather than 'flipping' onto another deal, especially when the mortgages were still not coming through and.....they were going to complete on a property at a time when tourism figures were down etc etc .....
Pam Prince,
Pure Cyprus Invest
You've got NO CHANCE in Spain. As an agent here for the past 9 years they cannot even sort out the basic issue of 30,000 properties without their occupational license and a general plan that will be 24 years old in January! What do politicians know about basic business sense... that's why they are politicians!
Ken Spencer,
Property Options Spain S.L.
