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Real estate 'swap shop' kicks off in Dubai |
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12/11/2008 10:23:43 AM |
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Smith & Ken, a Dubai-based real estate broker, has already concluded three deals in December under the new concept of "Swap Shop", which allows property buyers to exchange their properties.
Speaking to Emirates Business, Smith & Ken Chief Executive Benjamin J Smith said: "If a person is not able to sell his property, he has the choice of swapping it for another that is valued lower than his current property. Therefore, he has the chance to own another property and even hold on to some extra cash."
This is how the concept works: One Smith's client who owned a Dh4.5 million three-bedroom shoreline sea-facing apartment of around 2,184 square feet, was looking for a garden home. The agency found a property for him in Palm Jumeirah - a Dh9mn four-bedroom villa with a built-up area of 6,500 sq ft - whose owner was looking to sell it.
"We brought the two together and concluded the deal for them. There is always leverage in such deals. For instance, for a person who is swapping his garden home for the shoreline apartment, he gets hold of extra cash," said Smith. The buyer and the seller will be charged one per cent of the property value as commission.
Smith, who is optimistic about the Dubai property market, urged banks and lending institutions to raise the loan-to-value ratios once again to the earlier level of 80 to 85 per cent, so as to reinvigorate sales.
"Now is a good time for reliable brokers as we see a lot of inexperienced firms exiting the realty sector. Even if prices are dropping Dubai is still an attractive destination from a rental yield and investor's returns perspective," Smith added. The brokerage company is 11-month old and has over 3,000 clients.
According to Colliers International, value of residential properties in Dubai jumped by five per cent in the third quarter compared to the second quarter of 2008, with average price for completed homes rising seven per cent to Dh1,913 per square foot from Dh1,784. |
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Source: Zawya.com |
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