The availability of luxury apartments at half-price in 2011 show that either abnormal profits are being trimmed to make up for the high default rates of the initial set of buyers or a major correction of the much deflated real estate market is getting more realistic.
A Dh2 billion project had some 80 per cent of its units sold off-plan to European and Russian investors, as well as to the well-heeled from the Middle East, before the property crash.
As more investors pulled out, the developer reverted to the Real Estate Regulatory Agency (Rera) to cancel the original contracts and then resell at half-price to synchronise with prevailing market trends. It has another implication in that even the luxury-end has not been as crisis-resistant as previously thought. The irrational appetite of genuine homeowners and speculators alike has been curbed.
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