Poll: Abdullah Al-Salih: The off-plan system is witnessing increasing popularity in the Kingdom's real estate market, as it offers citizens the opportunity to own a property at a relatively low price compared to ready-made units. However, this system faces some challenges, such as buyers" concerns about delayed delivery or failure to meet the specifications stipulated in the contract. Amlak Real Estate Newspaper conducted a survey on the topic.
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D. Badah al-Noufal: Develop executive contracts that guarantee compensation
Dr. Badah Al-Noufal, interested in the real estate field, confirmed that the prices of off-plan sales products that fall under the umbrella of the Ministry of Municipal and Rural Affairs and Housing are the minimum for the region in the future, advising that the deduction plan should be suitable for income so that it does not exceed 40%, and described it as a distinctive opportunity for ownership. He pointed out that obtaining suitable housing at a subsidized price is considered the most important gains of the system for citizens.
<Al-Noufal explained that what distinguishes the price of <a style="color: #800000;" href="https://amlak.net. in housing products that it includes the building, land, plans, agreed upon finishes, follow-up of the engineering consultant, infrastructure and superstructure of the neighborhood with its sidewalks, in addition to the agreed guarantees, as well as the value of fees to connect the services of electricity, water and drainage, in addition to the registration of the deed will be in the name of the beneficiary.
On the other hand, the registration of the deed will be in the name of the beneficiary. Al-Noufal pointed out that the qualification and classification of real estate developers will have a positive impact on the activity, as it contributes to raising the level of services provided to the beneficiaries of the off-plan sale system, and the competent authorities will intensify field monitoring, which is no less important than qualification and classification, and warned that the lack of commitment to the specified time periods is a great concern for the buyer and makes some reluctant to buy, pointing out that there are stalled projects that should be completed and their facilities.
Al-Noufal summarized. Al-Noufal summarized the obstacles facing those wishing to buy off-plan in the following:
- Some designs, locations or prices are not suitable for the needs of buyers.
- The specifications of the offered residential unit differ from the unit delivered to the owner by some developers.
- Flexibility of the indicative contract by not specifying binding articles and sometimes just general talk.
- Marketing advertisements do not match reality.
- Delayed delivery of projects and delayed arrival of services and facilities such as parks for example.
Dr. Badah Al-Noufal concluded his talk to Amlak real estate newspaper by saying: “The best way to make buying and selling off-plan possible and free of financing risks is to develop executive contracts so that compensation for delays is immediate and binding on the developer.”
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Mohammad Al-Shehri: Faltering projects cause reluctance to buy
Mohammed Al-Shehri, CEO of Atbar Real Estate Development and Investment Company, attributed the reluctance of customers in completing off-plan sales deals. He added that there are other factors that are considered an obstacle to the activity, such as the poor implementation of some off-plan sales projects or the lack of the necessary quality of life available in other ready-made plans or projects, and pointed out that the challenges facing the developer such as the difficulty of providing financing liquidity in light of the emergence of economic conditions that limit the purchase of real estate by beneficiaries and thus the lack of money on which the project depends, such as high interest rates, or the high percentage of the down payment to finance the purchase of the property, which weakens the purchasing power and thus an obstacle to completing off-plan sales projects or their failure or delay in completing them.
<On the most important gains of the off-plan sales system, Al-Shehri said: "The direct participation of the off-plan sales committee for developers in licensing and following up their projects, as well as the National Housing Company through the Sakani platform and the electronic unit reservation system, marketing packages and other services that facilitate the developer's work in completing his projects as required, in addition to the most important aspect of providing liquidity to the real estate developer by receiving the purchase payments of residential units according to the contracts concluded between the developer and customers for the project, which facilitates the availability of financing to complete the project and at the same time the customer gets a lower suitable price <Al-Shehri believes that it is an important step to develop their capabilities and methods of attracting customers to them and providing the most attractive real estate products to customers, and it also puts the most deserving real estate developer in the place where he deserves to be and gain the trust of business owners and customers, as well as igniting competition in the development of the real estate sector and allowing the relevant authorities to determine the capabilities of developers according to their classification. <Al-Shehri pointed out that the delivery of the project within its timeframe earns the sale or rental on the map a reputation and greater confidence from customers to complete their deals through it, but what happens is that the delay in the progress of off-plan sales projects may often be due to conditions or services that are supposed to be available for the project from other parties that are not in the hands of the real estate developer, such as the delivery of electricity services to the project site and everything related to it from the approval of contractors As well as the renewal of some regulations related to construction methods or achieving some of the necessary requirements for regulatory bodies whose decision is not in the hands of the developer, so it is better for the real estate developer to have one regulatory body through which he can provide all the services required by his projects and delivered to him in the right place and time without the developer having to deal with several different parties that may be a reason for the delay of his projects.
<Mohammed Al-Shehri said: “One of the most prominent ways to address the challenges is to provide the necessary partial financing for the start of the project and its marketing plans through the regulatory authorities represented by the Ministry of Housing or the General Authority for Real Estate and recover them after the completion of the project, as well as providing the necessary facilities for the real estate developer from the regulatory authorities without high financial burdens that increase the cost of the project and also affect the liquidity that should be available for projects, especially with regard to uploading projects to the Sakani platform and opening the reservation system, marketing plans, building sustainability and other services that are provided to the real estate developer for a financial fee, as well as the
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M. Omar Almansour: Protecting corporate profits and preventing price hikes
The gains of the off-plan sales and leasing system are as follows The obstacles and concerns that limit the completion of off-plan transactions are high prices and delayed delivery of units in previous projects, as well as customers" concerns about the quality of implementation and the conformity of reality to the plans, and their fears of losing money in case the project fails.
Mansour said that the impact of extensions on the real estate market is not limited to the start of construction or the early stages of construction. <On the impact of delivery times on the reluctance of some to buy, Al Mansour said: “Of course, many buyers are tied to leases and calculate costs based on delivery dates, taking into account that delays may lead to changes in customer preferences or real estate prices." He pointed out that qualifying and classifying developers helps to improve the quality of projects and increase confidence between investors and customers thanks to standards and controls.
About the methods of qualifying and classifying developers. As for the optimal ways to make off-plan buying and selling possible without financing risks, Al Mansour identified three guidelines that stimulate the completion and utilization of the project, namely:
Don't give developers new projects before completing their previous projects.
<Providing insurance to protect buyers" funds in case the project fails. Tie project financing to the percentage of completion.
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Ahmed Al-Dhayan: Off-plan sales encourage foreign investment
Ahmed Al-Dhaiyan, a real estate consultant at Akkad Real Estate Company, praised the work in the off-plan sale or rental activity that contributed to increasing the supply of real estate units at competitive prices that encourage those wishing to buy to live or invest in real estate units, describing them as the lowest price.
Ahmed Al-Dhaiyan, a real estate consultant at Akkad Real Estate Company. He attributed the reasonableness of off-plan sale prices to a main reason; the real estate developer's ability to provide cash liquidity without accumulated bank interest rates during the period of development of the property, whether from outstanding payments or through the developer's financial solvency, indicating that the beneficiary does not bear any additional financial costs added to the price of the property during the construction period of the real estate unit compared to the prices of constructed real estate.
He added that increasing the number of real estate developers licensed for off-plan sales increases the supply of low-cost and low-priced housing units, which of course limits the increasing rise in real estate prices, and encourages real estate developers to switch to the off-plan sales system.
Dhayan called for the encouragement of real estate developers to switch to the off-plan sales system.
He called for encouraging real estate developers who are distinguished in the quality of their implementation of their currently constructed projects during the past five years, and their excellence in the after-sales service of the property, and those with attractive innovative ideas to create a better quality of life in their projects because their constructed properties are free of defects that appear after construction, by making an alliance between these elite companies, and creating new real estate entities to qualify them to enter the off-plan sales market by providing special facilities for them.
Dhayan called for encouraging real estate developers who are distinguished in the quality of their implementation of their currently constructed projects during the past five years, and their excellence in the after-sales service of the property, and those with attractive innovative ideas to create a better quality of life in their projects. He pointed out that this system has been applied by some countries and still encourages developers to raise their imports through off-plan sales, thus attracting foreign investment, and we saw global cities and capitals that were built on the map relied on a very large percentage of cash from abroad, and at attractive prices for housing or investment.
Ahmed Al-Dhiyan explained that selling off-plan at prices lower than the market price encourages even foreign investors to enter into direct investment in real estate units, which brings hard foreign currency to the state to pour into its economy, pointing out that this system was applied by some countries and still encourages developers to raise their imports through off-plan sales, thus attracting foreign investment, and we saw cities and capitals built in the world built on the map relied on a very large percentage of the liquidity brought in from abroad. As for the obstacles that the developer faces in the market, Al-Dhayan said that the erosion of confidence in the event of failure or delay in one of the off-plan sales projects is one of the most prominent challenges; where the buyer is reluctant to buy the unit because he has seen previous experiences of a real estate developer, so he sees that there is a great fear to buy from some developers, especially if the name of the developer is new and unknown in the market and has no experiences or reputation previously built in the market that testifies to the quality of implementation and delivery of its residential units.
Dhayan said. <Al-Dhayan said: "One of the most prominent challenges is the availability of residential spaces in vital locations close to services and quality of life, so that the real estate developer does not have to buy land at very high prices to implement the project and thus increase the selling price of the residential unit. Another challenge is the lack of flexibility in changing the requirements required for some residential plans, whether in the number of residential units per land or the building system, so we see in the capital, Riyadh, the construction of new products for real estate residential units in the form of floors in some neighborhoods, but in other cities this has not been authorized, such as the Eastern Province, noting that its requirements are very excellent, including providing parking spaces within the land area with a depth of 6 meters for residents of residential units, and this new product from the floor system has won the approval of many housing seekers to enable them to achieve their desires in distinctive locations, competitive prices and large areas compared to apartments <He adds: "Compared to some other countries that have more risks in buying a real estate unit on the map, the transaction is just a commercial contract between the buyer and the seller with a promise to deliver the property within a certain period of time that the seller is not obligated to abide by, which causes a lot of failure in the delivery of units, hence the existence of legislation and contracts This is the biggest guarantee for those who bought an off-plan unit and significantly reduces the risks and disputes in the future, and also encourages foreign investors to own in the future.
Al-Dhayan gave an example of some experiences in neighboring countries as follows:
Dhayan gave an example of some experiences in neighboring countries as follows:
Dubai: The unit is registered at the Land Department with all the contractual terms.
Bahrain: The off-plan real estate unit is not registered in the Survey and Real Estate Registration Authority until after the project is completed and the value of the unit is fully paid. The contract is notarized by a lawyer and the buyer himself registers it with the Survey and Land Registry.
Egypt: Off-plan sales are not officially registered with the Land Registry and Notarization Authority and the developer is not obliged to do so unless the buyer requests it, just contracts between the developer and the buyer.
Egypt: Off-plan sales are not officially registered with the Land Registry and Notarization Authority.
