The drastic slowdown experienced across the real estate and financial sectors has been driven through a lack of consumer confidence, exacerbated by numerous factors including the scarcity of credit. While there is no single solutions we believe the availability of mortgages lie at the core.š As developers, we need to again facilitate the flow of funds, to re-activate those investors who have lost confidence and adopted a wait-and-watch approach said Hussain Sajwani, Chairman of DAMAC Properties.
We need to take a cue from the consumer goods industry which has traditionally tied up with financial institutions and banks to boost sales – from television sets to home theatre systems that are made available on easy finance options.
Yes, real estate is a different industry and striking such partnerships will not be easy, but are necessary. For example, the first and most basic step for a developer is to work on strengthening his profile with banks. Get projects on the list of approved projects for financing.š Following on this, the success will be for the developers, who can strike innovative and preferential agreements with the banks to building an in-house team of experienced advisors who can seek and consult the customer instantaneously and seek the right bank for the consumer.
Today, mortgage availability is acutely secure, challenging and subject to extremely stringent lending criteria. The consumer & bank’s lending-relationships are complicated and, as developers if we can simplify these, it is a win-win.
While it is right that irresponsible mortgage lending should be discouraged, extremely tight and unjustified policies will do no good. Proper policies need to be crafted and we as developers can work along with the banks to develop customized policies. There is no one single solution, both the banks and developers want to be in business and the only way is to adopt a joint approach in re-instilling confidence. It is a critical for the recovery of the real estate volumes.
Many developers demonstrated such capabilities when the times were good. However it is now vitally important to continue and demonstrate such capabilities today. The rebound of the property sector largely rests on the recovery of investor confidence, primarily driven by banking confidence.
We have to move forward and solve this. It is imperative for developers to facilitate mortgage availability and financing packages for investors and buyers and make purchasing real estate a viable option for the masses once again.
It is time to focus on the broken link in the real estate supply chain – the sourcing of mortgages.
