Marketing of Dubai property to overseas investors needs new regulation to prevent damage to “Brand Dubai” from gimmicks being offered to coerce buyers including yachts and luxury cars, the chairman of Emaar Properties was quoted as saying on Sunday.
Dubai has ramped up its oversight on the emirate’s property sector in the wake of a real estate crash at the end of the last decade which sent prices down by around half from their peak, including measures to cap loan-to-value ratios on mortgages and a doubling of the fee paid to register transactions.
The property market has recovered strongly since the crash, aided by cash from foreign investors, many of whom have invested as they perceive the emirate as a safe haven in a region impacted by political tensions.
However, speaking to Arabian Business on Sunday, Mohamed Alabbar, who heads Dubai’s largest-listed developer, said there needed to be additional controls on local property companies when it came to attracting foreign investors.
“Instead of focusing on the fundamentals, what we see today are marketing gimmicks. It is alright to have an aggressive marketing strategy but there is a red line,” Alabbar was quoted as saying by the outlet.
“What is the logic of promising customers, who are investing their life-savings in a dream home, a luxury car or yacht?”
Some Dubai developers enticed customers with Aston Martins or Lamborghinis upon the sale of a luxury unit during the worst of the previous downturn to maintain sales.
The measure isn’t restricted to Dubai: in Ajman, one of the smaller emirates which make up the United Arab Emirates, one developer in 2014 offered citizenship of Antigua and Barbuda in the Caribbean, in exchange for buying a four-bedroom villa.
However, with property prices in Dubai soft after two years of high growth, the practice has been returning — buyers on one development currently being marketed will receive a personalised golf cart.
Such “gimmicks” needed laws from Dubai’s Real Estate Regulatory Authority, Alabbar was quoted as saying, as such practices threatened to undermine the trust of consumers in “Brand Dubai”-Reuters