The tremendous growth witnessed over the past five years in Dubai’s real estate sector should be bolstered with legislation aimed at regulating the market and driving strong future growth. This issue, as well as other relevant developments, was the focus of debate at Dubai Property Group’s (DPG) members’ meeting.
The meeting, entitled ‘The Existing Conditions and Future Challenges of Dubai’s Real Estate Sector’ was aimed at “providing a platform to help increase understanding of the market,” noted Adel Lootah, DPG’s Executive Director who moderated the dialogue.
“Some 14,700 units were planned to be delivered in 2006 and another 30,000 units expected for 2007. This rapid growth requires legislation to help stabilize the market and elevate the trust of all parties involved,” noted Adel Al-Shirawi, CEO of Tamweel. “A total amount of AED1.7 trillion was injected into the UAE’s freehold market without much regulation or risk mitigation procedures. Legislation, regulations and scientific data that provide investors more insight into market developments are required to bolster the sector’s strength.”
“However, the industry is facing bottlenecks from shortages in the labor force, thus resulting in a slow down in construction operations. Solving such inefficiencies in the market will help in capping prices and rents and maintaining the necessary balance between supply and demand,” Al-Shirawi continued. “The recently announced property law is a positive tool that will develop a healthier market. But, studies and projections based on facts and statistics are lacking. Such knowledge is essential in ensuring that incoming investment is in proportion to market requirements and occurs at the right time.”
Al-Shirawi also noted that a substantial increase in home loans occurred where the AED1.1 billion in mortgages extended to consumers in the year 2003 has grown to AED11.5 billion today.
Simon Townsend, director of CB Richard Ellis said: “Dubai’s achievement in having a progressive property law is highly recognized internationally. However, concrete and detailed regulations are needed to govern the different aspects of buyer-seller rights and obligations such as providing genuine services and collecting service fees from a non-resident owner.”
Linda Mahoney, President of Better Homes said: “Limited income families should be provided with alternatives. Developers should take into consideration the needs of this segment of the community. People are traveling distances and facing traffic congestion everyday just to avoid paying high rents. Developers should take an active role in being socially responsible and give back to the community in a meaningful way.”
Independent of favor or influence, DPG represents the combined interests of Dubai’s real estate community. The Group’s members include some of the highest profile real estate players in Dubai, such as the Dubai Development Board, Cluttons chartered surveyors and property consultants, Arenco Real Estate, Union Properties PJSC, Better Homes LLC and facilities management firm Asteco Property Management LLC.
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