Looking into development in Ajman

[InfoGuru]

Aggie
I was offered a 2 bedroom in Emirates City this week by Openshoreproperty.com for 460 AED/ sqft, good corner unit on 18th floor with open views. It was a 3 year payment plan and I was looking for 5 years myself. However that was the best deal I had recently seen, direct from the developer in this region. I am not sure if this is still available but you should speak to them. The guy I spoke to was called Andrew. The going rate in Emirates City seems to be around 525 AED/sq ft, so what you seem to be considering is also reasonable.

[Investoman_uae]

I have invested in Emirates Lake Towers and the price there has risen quite well since I bought it. The towers there are unique in my view, and well positioned with lakes and green space.

I think the price there is from 550/sqft onwards.

Inv.

[aggie_101]

wow, 460 AED/sqft? what is the name of the tower?

this is really low for a two bedroom. the rate in emarite city now is about 525AED.

[rudeboy]

someone has offered me their studio in lake signature for 480 dhs per sq ft for a 520 sq ft studio.

does anyone have anything good or bad to say about lake signature??

[fracas99]

Do you all know anything abouot Gr8 Holdings and lake signature?

[aggie_101]

Not me Farcas, sorry.

I visited ajman last weekend. The only construction I saw going up was emarite city. any idea about prices in ajman now?

[financier888]

[[/U][QUOTE=InfoGuru;75079]I have been looking to buy a 2 bedroom apartment in Ajman for many months. I do believe this is probably the best area within the UAE to buy as I have seen property prices increasing every month. I wish I had bought several months ago. However the weak £ is now affecting my budget and I am not sure what direction this will go in as it may make the payments even higher than I can afford.
The best areas I have found are Emirates City and Emirates Lakes Towers Region. There is a thread on "GSS and Openshore" in this forum which is worth looking at and I am considering a 2 bedroom apartment from Openshore mainly because of their very attractive payment plans.
Does anyone know what the rental returns are in this area. Openshore are forcasting 7% of property price at the time the property is let out. Is this reasonable or optimistic?[/QUOTE

Infoguru -

If I were in your position, I would NOT consider making a purchase / investment in Ajman until they have launched their version of RERA which will mandate a proper escrow account and ensure accountability on behalf of the developer - no small matter! (as this does not currently exist and I urge you to read through the various strings from people that have bought there already and you'll understand why... )

There are currently thousands of buyers that have purchased in Ajman and very worried if their projects will ever see the light of day - many may not...

In understanding the valuation in Ajman - you need to understand the Dubai market because the Ajman market was an 'outgrowth' of escalating costs of the Dubai property market which effectively priced many users out of Dubai and Ajman was marketed as a 'bedroom' community of Dubai - at a fraction of the price.

Now, if prices in Dubai are already dropping 30% (in some cases higher) and it's a fair assumption that in the months ahead - we'll see further declines to the benchmarks of 2006 - this will then affect the demand in Ajman, as units become more affordable in DUbai. In addition, tens of thousands of jobs have been lost in Dubai and what is not reflected in the stats - are the amount of people that were working on 'visit' visas in Dubai which accounts for additional tens of thousands - these people left to go back home and many more are planning thier exodus by the time shcool ends and we're not close the bottom of this economic downturn. So, with rents & prices coming down in Dubai (and you'll start to see appreciable corrections as we get close the summer) - many people that were forced to consider AJman or Sharjah - will return to Dubai. (Although Dubai prices will still not be as cheap as Ajman but Dubai is bankable)

The other major factor that drove the market in Ajman was the visa - which Ajman took off the table in Sept. Ajman may introduce this again, but in what form and under what conditions? No one knows for sure nor when. (I know for a fact that many buyers in Ajman were attracted not only by the price but for the VISA)

Insofar as representing a ROI - (return on investment) - 7% as projected? This is guess at best...(probably wishful thinking based on the 'past') because as previoulsy mentioned - with a decreased demand and many flats in Dubai becoming cheaper - why would people working in Dubai move there? Where are these tenants going to come from? - so - I would consider cutting that figure in half and finding a tenant may not be easy. Tenants wanting to live in Ajman will be looking for cheap rents and have many choices, with many having families looking for big units. (A two bedroom is a better bet in Ajman incidentally...) Whereas in Dubai, your chances of finding a tenant will be easier if you are felxiable in your pricing.

The other major issue and a serious one - is the electric. Until such time that we can know definitively that a power plant is under construction - chances are - your handover may be delayed indefinitely if there in no electric hook-up from the municipality. There has been discussions amongst reliable sources, that the JV on a power plant with a Malaysian firm has been put on hold and may be scrapped due to lack of finance. Although the Ajman municiplaity may indeed find another solution - these plants take 2-3 years minimumto complete.

When you purchase and AFTER you pay 20-30% you get the final contract from the Developer (the SPA), in that SPA, there is a clause that indemnifys the developer in the event there is delay due to NO ELECTRIC - so, you have to continue your payments if the electric is not supplied upon handover.. That means, you can conceivablely may own a completerd flat for a year or more and not be able to rent it.

On 'paper' these deals look good and are priced to attract investors but the reality is not as 'rosey'. There is no rush I assure you as there are very few buyers in the market and many who will be looking to sell their positions and take a loss... Even if the project is close to completion, I don't know of any developers that will gaurantee that the electric will be there upon handover and in fact, several buildings in the centre of town were completed and NOT handed-over- because there is no electric and that's in the centre of town where the grid is readily accessable. (I understand the Ajman muni is pro-actively working on quick intermediate solutions to support the grid - but that's only a stop-gap measure to provide the existing sector - NOT the outlining region on Emirates Road where many of these new developements are - no even sure if the infrastructure has been done that would supply the lines / hook-ups to these sites.. !)

My advice to you is to WAIT and don't think of buying anything in Ajman until such time the Ajman version of RERA is in place offering you protection in a regulated escrow account and after that - any payments you make MUST be made into the escrow accout. Any agent instructing you to pay into any other account other than the escrow - run away or be prepared to lose your hard earned money...

good luck

[NOOR_ALI]

financier888,
Am new to this forum. I would like an advice on this. I bought an apartment in Royal oasis in Al Humaid city in August 2008 with 5 years payment plan from BL PROPERTIES. So far i paid 15% plus the parking fees. Just recently they sent me a letter saying that the construction will start on 14th febrary 2009. I have signed a reservation form with them. They told me that i will be getting the SPA after i pay 20%. My next 5% payment was due end of January 2009 and i contacted the developer to delay it till end of february. Reading different posts in this forum and the world finicial crisis am getting kind of worried and my first question is: should i continue payment or cancel?

In the reservation form it says: "in the event the subsequent installments are not paid according to the payment plan, the seller shall be entitled to cancel the reservation and as a result, the holding deposit or 10% of the purchase price will be forteited".
Now at the time of booking i payed 5% (26586.9 AED) plus (19000 AED of the parking fee).
SO my second Q: if i cancel would i lose all the money i payed so far?
Thanks in advance
ps. ON all the receipts for all my payment so far, are stamped with non refundable.

[financier888]

Originally Posted by NOOR_ALI

financier888,
Am new to this forum. I would like an advice on this. I bought an apartment in Royal oasis in Al Humaid city in August 2008 with 5 years payment plan from BL PROPERTIES. So far i paid 15% plus the parking fees. Just recently they sent me a letter saying that the construction will start on 14th febrary 2009. I have signed a reservation form with them. They told me that i will be getting the SPA after i pay 20%. My next 5% payment was due end of January 2009 and i contacted the developer to delay it till end of february. Reading different posts in this forum and the world finicial crisis am getting kind of worried and my first question is: should i continue payment or cancel?

In the reservation form it says: "in the event the subsequent installments are not paid according to the payment plan, the seller shall be entitled to cancel the reservation and as a result, the holding deposit or 10% of the purchase price will be forteited".
Now at the time of booking i payed 5% (26586.9 AED) plus (19000 AED of the parking fee).
SO my second Q: if i cancel would i lose all the money i payed so far?
Thanks in advance
ps. ON all the receipts for all my payment so far, are stamped with non refundable.

Based on what you stated - regarding the contract terms and conditions related to 'cancellation' -they would be entitled to keep 10% of the sale price and be obliged you to pay the balance.. (you said you paid 15% - so you'd only get back 5%) I don't know if what you paid for parking would be included although it is part of the sale price... however, BL are experienced developers from Pakistan and they should not have a problem completing the job provided they are not over extended. They are a professional outfit with a proven track record, rather rare up in Ajman.....

You should check the latest ARERA laws - because any new laws they have passed that link payments to construction progress would supercede your payment schedule which sounds like it is calendar based... Before you make your next payment, I would urge you to request the SPA, especially as you are prepared to make the next installment of 5% which brings you to the 20% - they should oblige you... You should also check the status of their escrow acct and ALL future payments should be made directly to the bank. This is already law and you should ask them the name of the bank for escrow and the particulars..

If you are based here - locally - you can easily check to see if they are starting construction which commences tomorrow.. Wait a few days and check the site...

good luck

[NOOR_ALI]

financier888,
Thanks for ur reply. I ve decided to send an email to BL properties at ask them how much will i lose incase i cancel and this the reply I got 'if you don’t want continue the payment and cancel the unit by the law 30% of total amount is forfeit so you will not get back anything '.
!!! I Thought the law of 30/70 only in Dubai, and howcome in the reservation form they said incase of cancelation, 10% will be taken? I send another email for clarification. I feel i cant trust those people anymore