Employees have identified difficulties they face in owning housing units, most notably the high prices and the "down payment"

Realtors: 8 procedures to facilitate employees' purchase of real estate

• The demand is currently concentrated on the housing units of the studio, room, hall, two and hall categories.

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Employees said that there are difficulties facing their ownership of apartments and housing units in the country, most notably the high prices and the large down payment, as well as the high bank interest on financing and low job security, especially after the Corona pandemic.

Realtors demanded that eight measures be taken to encourage employees to own units, including reducing housing unit prices, extending mortgage payment deadlines, reducing bank interest, reducing or canceling the down payment, as well as reducing administrative and registration fees, as well as establishing special incentives for residents more. From 10 years, in addition to increasing the duration of work contracts to support job security, and finally housing first, then payment.

They indicated to "Emirates Today" that the segment of employees is the largest in the country, stressing that their entry into the sector will stimulate and support the market.

Constraints

In detail, the employee, Abdul Hamid Subhi, said that he had previously failed to buy a medium-sized apartment, despite his relatively high salary, due to the fact that the value of the apartment was significantly high, and there were no facilities that helped reduce the financial burden on him.

For his part, employee Ibrahim Hamza expressed his desire to buy a private apartment for him instead of renting a house, especially since the prices of apartments in the emirate in which he lives recorded a remarkable decrease during the last period, but he indicated that there is a difficulty facing this due to the large down payment and the high interest Bank on financing.

The employee, Ghassan Abdel Nasser, considered that among the obstacles that prevent the ownership of a property is the low job security in light of the Corona pandemic, in addition to the difficulty in obtaining a long-term housing loan with low interest, especially as he works in a private sector company.

Ownership programs

In addition, the CEO of Medalion Associates, Masoud Al-Awar, said that there is a need to design special programs for real estate ownership directed to the benefit of the employees, both citizens and residents, pointing out that such programs do not currently exist in most real estate companies.

Al-Awar demanded that the programs directed to employees include incentives and facilities that take into account the income and nature of this class, the most important of which, for example, is the approval of a reduction in the value of the unit and special incentives for residents for more than 10 years in the country and housing first, then payment after housing three or five years with an advance payment Less for employees, especially those working in government and other agencies.

The role of banks

Al-Awar stressed the need for banks to play a greater role in making these initiatives successful by providing appropriate facilities and guarantees, pointing out that banks should work better than they are now to support the real estate sector by introducing new segments into the market by motivating them to buy.

He mentioned that the banking credit system in the country is more qualified than ever before to fulfill this role and facilitate the employees' access to easy housing loans with specific facilities according to each customer, especially that banks are fully aware of the credit history of customers, their income and their ability to repay while maximizing the benefit from modern technologies such as intelligence Artificial in identifying the credit position of the dealer.

Al-Awar explained in this regard that banks should take the initiative and contact dealers to inform them of ways to benefit from their savings and savings accounts for them and their children, especially senior employees because some are not aware of appropriate investment methods, and that this is the role of financial institutions in the country.

Incentives

For his part, Saeed Abdul Karim Al Fahim, CEO of Stratom Company for Owners' Associations Management, said that there is no significant demand among employees in general to buy and own real estate instead of renting.

Al-Fahim called for incentives such as reducing the value of administrative fees and real estate registration fees for real estate less than one million dirhams, for example, as happened in a number of European countries, in addition to banks reducing the value of interest on real estate financing less than one million dirhams as well, so that it is 2% at most, for example. The example instead of 4% or more is currently serving the employee category.

He pointed out that some banks give facilities to merchants who have more than one source of income to reduce risk, while there are reservations about employee loans even though they have one main fixed income source.

liability

Al-Fahim considered that some senior employees may be responsible for the lack of interest in real estate ownership as a result of what he described as directing part of the spending to luxury spending, such as preferring to buy a luxury car at 700,000 dirhams, for example, and not buying a small property worth 500,000 dirhams.

He stated that the demand is currently concentrated on residential units of the studio, one room, hall, two rooms and hall categories at most, while the demand for three-bedroom apartments and a hall and “duplexes” has decreased significantly, indicating that this matter must be taken into account by developers permanently to match the needs of the market and its requirements to stimulate demand. In the market.

"Rent to own"

Al-Fahim pointed out that some developers, especially in Dubai, began expanding the concept of "rent to own", on periods of up to 10 years to attract new segments to the market, and developers also began offering to pay 50% before receipt over three or four years, and the rest after receipt over periods of time. Lifetime up to five years, which is very good and should be expanded to support the employee segment.

Keep up with developments

In turn, the Chairman of the Board of Directors of the Arab Gulf Investment Company, Khalifa Al Muhairbi, said that there is a need to keep pace with the developments resulting from the Corona pandemic to increase job security, especially that the number of real estate buyers among employees is very small, calling for increasing the terms of employment contracts for employees to five or 10 years, especially in private sector companies, as well as increasing the length of residence in the country to a similar number of years, which encourages employees to own real estate.

Al-Muhairbi explained that increasing the terms of employment contracts motivates banks to finance employees and give them facilities in financing to increase confidence in their staying in the country, calling on banks to increase the repayment periods of real estate loans to employees to facilitate ownership operations.

He pointed out that a very small percentage of the employees own apartments instead of renting them, pointing out that the prices of residential units have achieved a significant decrease during the recent period, which provides good opportunities for employees, and that private real estate companies in Dubai have begun to give incentives such as obtaining an apartment and the other by half Price, plus repayment over six-year periods.

The largest slide

In the same context, the General Manager of the "Truth" Economic Consulting Company, Reda Muslim, said that the employee segment is the largest segment in society, considering that attracting them to owning real estate helps stimulate demand in the market and support the real estate sector during the current circumstances.

Muslim stated that the introduction of a segment of employees in the sector requires specific concessions from real estate companies and banks together, explaining that real estate companies should reconsider the value of the property, granting facilities that suit employees and form elements that attract them, such as canceling or reducing the down payment and giving furniture free to the owner.

He added that the banks should also make concessions related to the long-term financing that extends from seven to 10 years, while providing easy interest that is less than the commercial interest, especially since the bank has a guarantee that is the property registered in the employee’s name.

Muslim stated that the employees who can own property are those whose salaries range between 40,000 dirhams and 65,000 per month, indicating that the employees ’embarking on ownership instead of rent needs support for job stability, especially in light of the Corona pandemic.

The 8 actions

■ Reducing housing unit prices.

■ Extending deadlines for mortgage payments.

Reducing bank interest.

Reduce or cancel the down payment.

Reducing administrative and registration fees.

■ Adoption of additional incentives for residents over 10 years.

Accommodation first, then payment.

■ Increasing the duration of employment contracts to support job security.

Economic units

The CEO of Medalion Associates, Masoud Al-Awar, called for providing economic units in the market again, after they almost disappeared, in order to attract a segment of employees to the real estate ownership market while preparing appropriate legislation for ownership and special facilities to ensure everyone's rights.

• Employees who have expressed a desire to buy a private apartment instead of renting.

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