Abu Dhabi: The emirate of Abu Dhabi should develop a comprehensive set of real estate regulations to make mortgage, brokerage, and land registration procedures more transparent.

A healthy real estate market requires a fully functional mortgage market with government support and a full-fledged credit bureau with its regulatory back-up, a panel of mortgage experts said at a meeting on "mortgage market developments in Abu Dhabi" at Cityscape Abu Dhabi yesterday.

Abu Dhabi opened up its property market for freehold and leasehold in 2004-05 that triggered massive development activities led by Aldar, Sorouh, Al Qudra Real Estate, Reem Developers, Mubadala and others.

A large portion of Al Raha Beach development will be handed over to the buyers in the next 12 months.

Despite being less than 10 years old, the UAE's mortgage market is improving, analysts said.

Since buyers and lenders have become more prudent it requires a quicker response from government officials in the capital, the experts said.

"A healthy real estate market requires a fully functional mortgage market. To get it properly established we will need some government support and structure, which should be in place sometime next year; we expect Abu Dhabi to witness a significant mortgage market growth by 2012," said Alex Gemici, Managing Partner at Greenstone Equity Partners.

A statement sent by the Abu Dhabi Department of Economic Development (DED) and Abu Dhabi Council for Economic Development (ADCED), stressed the need to regulate Abu Dhabi's real estate market through government entities that will prepare laws and regulations related to financing, sale on the map, real estate brokerage, and land registration procedures.

Updated data

DED and ADCED pinpointed the need to provide more updated data and statistics for the real estate sector, allowing government entities, private sector companies, investors and businessmen easy access to Abu Dhabi real estate market and its current and future needs and trends.

"Abu Dhabi currently has a credit bureau, but it doesn't have a regulatory backup. Submitting credit data, for instance, is not compulsory, which is one of the necessities for a beneficial mortgage market," Gemici said.

Banks currently lend up to 85 per cent of the value of a property, and the borrower is expected to put in the remaining 15 per cent which is ideal, according to the panel. Most banks charge between 5 per cent and 6.5 per cent interest rate on loans and mortgages. However, the average rates of Abu Dhabi Finance (ADF) range from 3 per cent to 5 per cent.

"A property law, a credit reference bureau, greater clarity around enforcement of credit balance, all these are necessary steps that are still not in place, but are being implemented soon. We need more regulative mortgage rules around fees, charges, settlements in order to make it easier to understand customer surveys across banks," said Philip Ward, CEO of ADF.

The statistics centre in Abu Dhabi is currently conducting studies on the Abu Dhabi construction and real estate market.

According to Fahd Saeed Al Raqbani, Director General of the ADCED, Abu Dhabi's real estate market is experiencing a state of stability recently, with prices coming back to normal following the global financial crunch.