Free space

Price correction

Mohammed Al-Hafiti

04 April 2021

It has become common in the real estate market to ask about the original price for sale from the developer, and to compare it to the real price, or the corrected one as it is called today, where the loss rate of some investors reaches 20% ؜ in some real estate projects for different developers and in different regions.

Accordingly, is it true that the developers ’profit margin was built according to correct standards and strategy, that guarantees a kind of balance in the market?

Or is it the same equation in creating the greatest desire for investors to buy some projects that have been marketed due to their limitations and high quality specifications, to the point where some developers have proposed a lottery system to sell these units, after an unreal demand was created, in exchange for raising the profit margin to levels in which it was The developer is the winner on one side, and the investor is a loser in this equation?

That is why a question may arise in our minds, which is do the developers consider the investor a real partner in the proposed projects?

Or is it a profitable process to reap the greatest liquidity from the real estate market?

Therefore, the question here is why does the price of the property decrease upon delivery?

Is this price really the actual price that is due after reaching the delivery stage and the end of the project?

In my view, it is the unhealthy practices of developers that have led to the inflated profits of their profits in the past years, and with the investors' awareness of these unfair price inflation, after receiving the real estate units and their failure to comply with the promises of the unique specifications, which in turn led to the failure of the feasibility of the investment attempt from Before investors, we clearly see the reluctance of some investors from the real estate market, and their aspiration to other markets where the return on investment would be of better feasibility.

It is worth noting that some of these practices are represented in selling some real estate units at a specific price, and then selling a similar unit in the project itself at a lower price, or with better facilities and payment plans, after some developers realize the difficulty of selling at the price at the beginning of the project, or changing the type of use. From hotel apartments to apartments.

Here we suggest that the study of pricing projects and real estate units be subject to strategies that ensure the balance of the real estate market, because this sector represents of great economic importance, as these price increases are related to regions and differ from one place to another. Stability of their prices.

Since developers now have a big role, similar to the role of banks in the real estate financing process, by offering long payment periods and discounts to customers who wish to have lower payment periods, but this feature may sometimes be used by some developers in manipulating prices before offering real estate units and after Sold out completely.

It has also been noted that some real estate developers claim to sell residential units at high discounts from the original price on the condition of immediate payment, and it becomes clear later that the existing prices are incorrect than the original price, or the project is not available from the ground up, and the investor has been involved in a fraud attempt.

Accordingly, we note to the investors the need to refer to the Dubai Real Estate Regulatory Agency (RERA), and to verify the laws, regulations and laws that have been put in place in the interest of investors, and investors must always refer to reliable sources because the department and the institution provide all the investment requirements correctly.

Real estate consultant

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