In the 1990s, one of the burning questions in the US was how can we survive the evolving, unpredictable Dubai Investment Real Estate. In the period of five years, more than half of homeowners across the nation have experienced a rapid decline in property value. This predicament resulted in consumers seeking insurance against price drops, which resulted in home equity protection policies being created in turn. Buyers may enter into a deal to insure against loss of equity in their home for a small percentage of the property value, in the event that the economy took a turn for the worse. The contract allowed homeowners to collect a payment equal to the percentage decrease in the local home price indexes at the time of the sale of the house.
Although the first issuance of such value security plans dates back to 1978, in the last few years of the last century, the practise gained popularity. The goal of these financial agreements was to attract and retain homeowners in communities marred by a long-term decline in the value of land. Together with a variety of local partners, Yale University launched a value security initiative, resulting in nearly 60 customers and $4 million in home value protection in 2002.Following a successful initial process, the initiative turned into a broader opportunity for real estate, garnering national media coverage. At the height of the real estate crisis, during the 2008 recession, the programme also found participants in foreign markets, particularly in Canada.
Since then, index-based futures contracts have remained largely limited to the Western world for hedging market risks in real estate. However a property value security scheme has recently been implemented in the UAE as the first of its kind for the country. The UAE's first value security programme for its flagship project, Al Zahia, was launched by Sharjah Holding, a joint venture of Majid Al Futtaim Properties and Sharjah Asset Management. As per the party, home buyers can demand a value differential of up to 8% if more lucrative offers are offered in the future.
A value protection plan's primary objective is to provide investment coverage in a tumultuous market. Developers have extended home ownership options to low and middle income families by providing ways to offset losses suffered during a market downturn. If the economy plummeted, homeowners, having invested their life savings in homes, could not afford to move or refinance while the earliest programmes were being devised. They were also stuck by properties that were slowly decreasing in value. Despite these threats, affordability did not inherently lead to higher prices, with consumers wary of markets continuing to decline. Under these conditions, security services have proven to be important in attracting consumers to a significant degree.
The revitalisation of communities plagued by market turmoil is another field where security plans have had a tangible effect. Because the quality of life, cultural climate, facilities, accessibility and ROI are primary factors affecting the choice of a neighbourhood by the buyer, developers and sellers have included security plans in strategies for community growth. Security services are designed to further sweeten the pot in the sense of the Developers in UAE, where a drop in costs translates into a rise in sales volume.