Business | Property
Channel Sponsor
Dubai realty sector entering new era
As Dubai's real estate sector kicks into high gear for its annual Cityscape exhibition, it does so within a new era of property development.
- By Robert Ditcham, Staff Reporter
- Published: 00:23 October 13, 2007
- Experts say market moving towards greater stability and investor confidence.
- Image Credit: Gulf News Archive
Dubai: As Dubai's real estate sector kicks into high gear for its annual Cityscape exhibition, it does so within a new era of property development.
The multi-billion dollar projects that will be unveiled during this week's event (October 16-18) will be incorporated into a tightly regulated market that has experienced new laws on property brokers, the introduction of escrow accounts and the creation of the Real Estate Regulatory Authority (RERA).
Upcoming projects will be merged into the Dubai Urban Development Framework, which aims to create a planning and management framework for Dubai.
Analysts say these initiatives are moving Dubai's property market towards greater stability and investor confidence. The story was different 12 months ago when the market was characterised by legal loopholes, wild price appreciation and a speculator dominated market.
In its report on Dubai real estate, investment bank EFG Hermes highlighted several factors which point towards a more mature market.
It mentioned a wider and rapidly growing base of buyers, less dramatic changes in price, a reduction in speculator behaviour and advancements in the regulatory environment, all of which have increased confidence and market transparency.
Pillars
"One of the most important pillars for the stability and continuation of growth of the Dubai property market is a robust legal system. We have seen significant improvements in the legal structure over the past 18 months," EFG-Hermes analysts Sana Kapadia stated in the report.
But analysts say the job is far from complete. The much-anticipated Condominium Law is still pending.
When passed, it will clarify the rights and obligations of homeowners towards common hold land in property developments, as well as set out the responsibilities of home owners associations.
EFG Hermes says Dubai needs a mortgage law to clarify the rights and obligations of mortgage providers and holders, as well as issues related to mortgage defaults and possession.
For many years, property experts have clamoured for clarification of inheritance procedures and compensation to buyers for late delivery of property.
"Once the condominium law and mortgage rules are enacted and other grey areas dealt with, confidence from potential buyers is expected to increase even further," Kapadia added.
However, Rabia Khan, managing partner at Dubai-based registered brokerage Think Space, urged RERA to focus on "cleaning up" the existing regulatory framework before making more changes.
"We are seeing a lot more structure, but not everything is in effect yet and companies might be slow to implement recent changes. I would urge RERA to focus on fully implementing the new laws before introducing anything new," she said.
In addition to legal improvement, the publication in June of the Dubai Urban Development Framework showed that new property developments are part of a clearly defined urban plan.
Congestion
In the past it was uncertain how new projects would interact with each other. This created traffic congestion and imbalances in the supply of property.
Developers were allowed to focus on building high-end projects, tempted by the higher returns they offer and the prestige of setting new standards in luxury living, rather than invest in much-needed low-cost housing.
The Dubai Real Estate Corporation (DREC) was established in June to fill niche sectors of the market.
The corporation, which operates as a full-solution real estate company, is responsible for providing a number of value-added services for property registered in the name of the Dubai Government and its departments.
These services include real estate management services, leasing and facility management services, and consultancy in asset management. Investments within the hospitality, entertainment and leisure sectors are also central to DREC's operations.
"DREC has been created to further develop Dubai's real estate assets, and we aim to achieve this by focusing on key areas, targeting niche market gaps, and complementing Dubai's urban growth by focusing on underdeveloped areas," said Hisham Al Qasim, CEO of DREC.
DREC says it is in the process of conducting preliminary studies about the real estate sector in Dubai, the results of which will highlight key areas for development based on growth potential and market demand.
Al Qasim added: "In the near future, it is our goal to expand our operations country-wide, and we hope to play a pivotal role in the UAE's next chapter of development."
Share this article
Related Articles
-
Dh40b projects to be announced
Dubai firm to announce projects worth Dh40b
-
Developers line up for Arabian Canal
Developers line up to grab plots in Arabian Canal project
-
House rent payments could go monthly
House rent payments in Dubai could go monthly says new report
-
Abu Dhabi housing woes will continue till 2010
Abu Dhabi housing woes will continue till 2010
-
Dubai to get 150,000 more residential units
Dubai to get 150,000 more residential units
-
Land deals in Dubai hit Dh6.6b in September
Land deals in Dubai hit Dh6.6b in September
-
Nakheel sells 35 properties of The World
Nakheel sells 35 properties of The World development
Gulf News classifieds
Popular in Business
Business Editor's choice
-
Credit swaps... a fair trade
Would you swap an unbuilt unit at the Lagoons for an apartment at JBR?
-
New face of safety
Volvo reveals a sleeker S60, ready to hit the roads early next year
-
When the Web lives worldwide
Cutting-edge firms are building massive data facilities all over the globe
-
Banking
Mortgages: there's light at the end of the tunnel
UAE buyers are securing home loans again
