A real-estate of affairs

by Zoya Malik

Suffice it to say that property buying can be a very dizzying experience. While researching Dubai’s housing sales market recently, I discovered the numerous perplexing challenges and limitations that house hunters are currently facing, in a lopsided market (expatriates can only buy in certain ear-marked developments), inflated by Dubai’s economic recovery.

 

 Rents surged by 40 per cent last year, boosted by the Expo 2020 excitement and are now forcing tenants to re-assess renewing their leases. Due to these extreme hikes, many long-standing Dubai residents are deciding to take the plunge and enter the property market. However, the UAE Central Bank’s highly anticipated and imminent new regulation on banks’ mortgage-lending caps has caused anxiety among purchasers. Under this regulation, based on a loan-to-value ratio for the first investment up to five million dirhams, expatriates will be limited to borrowing up to 75 per cent of the property value – the challenge being to gather a minimum down payment of 25 per cent. (Currently most banks require a 15 per cent deposit and will finance the balance on various interest-rate terms).

So borrowers, otherwise confident about meeting monthly repayments, will immediately feel the burden of having to find a larger deposit that may effectively price them out of the market. Buyers must also calculate for paying an additional 6 per cent on top of the property price to include the Buyers fee at 2 per cent, the Sellers fee at 2 per cent and the broker’s commission at 2 per cent, which shouldn’t apply if buying directly from the developer. There is also a handling charge by the Land Registry on the purchase. As market pressure bears down, so momentum abounds and prices are rising to squeeze out as much juice and mileage for all interested parties. New projects are now coming on-line at a steady pace in Dubailand, Sports City and Jumierah Village South, but it seems not quickly enough to satisfy this pressing demand. And everyday prices for the same properties are being pushed up due to several unprecedented factors.
In new developments, buyers may be delayed in securing the property of their choice having to await the seller acquiring the title deed to the property from the Land Registry.  Sellers in possession of a title deed have turned this to their advantage and are charging a premium on the advertised prices for their new builds, to take advantage of this time lag. In view of the looming mortgage cap, buyers are submitting to these higher charges as competition heats up between units’ bona fide handovers. Many buyers are even buying properties unseen, in a bid to clinch the best deals of the moment.
Banks are challenged to step up lending at attractive rates to capture this new buyer interest and brokers equally to secure the best price, close the deal before regulation comes in and earn their commissions.
The only other hope is that the rental market also comes to heel, giving residents more options to suit their lifestyles and wallets.

 Ref: http://www.cpifinancial.net/blog/post/25144/a-real-estate-of-affairs

Getting a business bank account and online payment gateway for a start-up

by Tamara Pitelen
 

Tamara Pitelen chronicles the journey to opening a bank account for a small business that also offers an online merchant payment gateway.

It is three months since I first attempted to open a business bank account for my new born company, Awakenings Media.

You can read my first blog about this journey here.

I have succeeded in opening a Rakbank business account. The process took about eight weeks and involved the hapless staff of Rakbank paying me a visit to my office at least five times. Three of these visits were because someone back at their head office did not think my signature was suitably consistent across the various documents they required me to sign. So, a number of young gentlemen were forced to make the trek from their office in Deira to my office in Media City – via public transport – so that I could have another go at signing my signature 25 times in the same way. I ended up telling the last man that I just couldn’t do it. I couldn’t write my signature the same way 25 times. He said, “please Madam, please, just print the letters, it must be the same.” So, I ended up dropping the usual flourishes, strikes and swirls that one makes when doing their signature and reverted to primary school block printing of the letters in my name. I know this is going to come undone. I know that in, say, six months or so, I’ll forget and sign a cheque with my usual flourish, which will be rejected by the bank and involve weeks of back and forth trying to sort it out.

Anyway, I do want to give full credit to Rakbank for being so obliging. In stark contrast to various other banks that couldn’t be bothered even emailing me more than one word answers (Citibank), banks with random fees for nothing in particular (ENBD) and banks I’ve long decided to avoid for a long and bitter list of reasons (HSBC Middle East), Rakbank went far and beyond the call of duty to help me open my account. It just took quite a long time. However, I’ve since found out that Rakbank can’t offer me a merchant payment gateway for my website. As a small publishing company, I’d need to take payment from people through my website in return for subscribing to my magazine. We are not talking Donald Trump levels of transactions here but I do need to be able to take payment by credit card or Paypal from people who want to buy my magazine. It turns out that only four banks in the UAE have the license to offer an online merchant payment gateway. This big four are Emirates NBD, National Bank of Abu Dhabi, Mashreq Bank and Abu Dhabi Commercial Bank. Why can't a UAE-based start-up just use Paypal? Mainly because you can't get the money out of Paypal unless it's linked to a bank.

I’ve already decided against ENBD because of their random AED 200 a month fee for just having an account. So I just called Mashreq Bank and they tell me that yes, I can open a Business Value Account that will get me a merchant payment gateway, the main conditions include maintaining a minimum balance of AED 10,000 (falling below gets you a AED 250 per month fee) and a standard monthly fee of AED 50. I can live with that.
Within half an hour of my inquiry call on 24 December 2013, I got a call back from a gentleman who is emailing me the initial set-up documents for the payment gateway.
By early January, I had my account set up and activated, my Visa debit card and chequebook couriered to me and I was told the set up of my online payment gateway was on the way. It all took about 10 days and nobody said anything about my inconsistent signature.

So, if you’re a start-up looking for a UAE bank that can offer you a business account with an online payment gateway for your website, I recommend Mashreq Bank.

Next step, getting the payment gateway integrated into my website. I’ll do another blog about that.