Property News · April 13, 2016

Emirati buyers targeted in Al Forsan rent-to-buy scheme in Abu Dhabi



Al Forsan, the Abu Dhabi-based sports resort and housing complex, has come up with a “rent-to-buy” offer targeting Emirati buyers.At Cityscape Abu Dhabi, the government-owned developer said that it was offering rent-to-buy as an option for 50 of the 385 villas and town houses it has completed in Khalifa City A, on the outskirts of the capital.Under the terms of the deal, revealed yesterday at the Cityscape property exhibition in the capital, Emirati buyers will be able to pay a premium on their rent for five years, which can later be used as a deposit on a mortgage.
This means that for a Dh4.9 million four-bedroom town house, which would normally rent for Dh210,000 a year, under a rent-to-buy deal, a buyer would pay a total of Dh300,000 for five years.At the end of the five years, Al Forsan would then give the buyer back their Dh450,000 overpayment plus a credit of another Dh1.05 million – enough cash to pay for the 20 per cent deposit required by banks to raise a mortgage.
Although construction on Al Forsan Village started back in 2008, it was not until the start of this year that the first residents moved into the development, which also has 440 apartments.Al Forsan declined to say how many of the villas and apartments it had sold so far, or how manywere leased.But it said that during Cityscape so far it had received bookings from 12 buyers.Rent-to-buy was offered extensively by developers in 2011 and 2012 in Abu Dhabi in the wake of the global financial crisis as developers struggled to sell vast inventories of completed apartments, which wereunoccupied.
In 2011, Sorouh launched a similar rent-to-buy scheme to encourage buyers at its Sun Tower on Reem Island. It was quickly followed by Aldar, which offered rent-to-buy on flats at its Raha Beach development. And in 2012, TDIC marketed apartments at its The Resi­dences at The St Regis Saadiyat Island resort with another lease-to-buy scheme.But as the property market improved from 2013 onwards, the concept was not actively promoted.
This week, Cluttons reported that villa prices in Abu Dhabi fell by 1.4 per cent in the 12 months to the end of March, as falling oil prices dampened sentiment.Al Forsan denied that it was offering rent-to-buy as a response to the current softening Abu Dhabi market.”Our market is local and we’re pretty sure that the low oil price will not affect buying ability,” said Rashed Al Qubaisi, the general manager of Al Forsan International Sports Resort and spokesman for Al Forsan Real Estate Management.
And, despite the softening real estate market local property brokers said that they did not expect more developers in the city to start offering similar schemes.”Rent-to-own is really a very poor deal for developers,” said Ben Crompton, the managing partner of Crompton Partners. “It is only offered by developers on completed projects and is generally a sign that the developer hasn’t been able to sell off-plan. It’s generally a last resort because developers prefer to sell off-plan if they can and get that cash up front.”
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Source : thenational.ae
Read more…Emirati buyers targeted in Al Forsan rent-to-buy scheme in Abu Dhabi

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