The Dubai Government will encourage but not guarantee property projects under the “Tayseer” programme, said Marwan bin Ghalita, CEO of Real Estate Regulatory Agency (Rera) in an interview with Al Arabiya TV channel.
He said that Tayseer aims to activate the property sector by encouraging banks to give loans, developers to reduce prices and investors to buy through a programme that ensures transparency.
Each bank has set a risk rate which is known in the money sector. The government does not guarantee projects, he said.
Rera encourages developers to join the Tayseer programme and submit their projects to the agency with feasibility studies. The agency will study each project and check if they are feasible for financing and accredit them as a “Tayseer-qualified project”. Banks will also be recommended to finance feasible projects.
“Such transparency will encourage investors to buy and will increase a feeling of safety of their investments,” said Ghalita.
Developers have also been asked to re-study projects not started where the main contractors had yet to be appointed. Ghalita said he expected in such cases, prices would be reduced by 20 to 30 per cent.
Should a developer fail to continue a project there will be means for banks to breach the finance contract in a short period.
“Currently the duration is 90 days as per the law No 14 and we are studying with the developers to make the process easier,” he said.
Ghalita told the channel that while profit rates would be left up to banks, the banks would be encouraged to give easy loans, adding that some banks and developers welcomed the initiative and believed it would help activate the property market.
Answering how bank profits were specified at Dh1.8bn, he said that this was an estimate based on the number and value of the projects. However, each bank had its own calculations, he added.
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