Are Dubai authorities more in control of the real estate market this time?

[totallyproperty]

The boom and bust which occurred in the Dubai real estate market just a few years ago may have been forgotten by some but others are still feeling the financial distress it caused.

Do you think the Dubai authorities are better equipped this time around to ensure we don't see such a scenario again? We cant really avoid boom and bust in general but perhaps it is possible to control fund flows, speculative investment, etc?

Do you feel more confidence in the Dubai authorities this time round?

 

[howayda]

I am agree with your statement "Do you think the Dubai authorities are better equipped this time around to ensure we don't see such a scenario again?"

and my answer is yes

 

[salahh]

yes this is why

Hi there,

My first post yay!!! To answer your question in brief, I am sure you are well aware the boom and bust that happened in the real estate market was not specific to Dubai however because of its diverse investor database and well built infrastructure the real estate market in Dubai was the first to pick up compared to its pears in the GCC (Gulf Corporation Council). My honest opinion being in the real estate sector myself is that the Dubai government really believes in its story "vision" and they are learning how to monitor and govern the real estate market in Dubai. The last crash in the real estate sector brought alot of bad publicity to Dubai and that’s a big no here!!! Dubai is trying to be the leader in direct foreign investments and having a bad streak of negative publicity is not something that they would allow. Now the good part, some of the inactive taken to govern and regulate the real estate sector include the introduction of higher fees!! 4% double what it use to be.

Second was the introducing a new law that bans speculators to sell any off plan property without having had paid at least 30% of the property value and there are talks that they will raise it to 50%.

Dubai mega developer Emaar Properties has banned real estate agents from on-selling any off-plan properties they purchase until handover, in the latest clampdown on flipping.

Now the developers all the developers now could not use the flaud presale model in investment s apart from emmar I could explain if you would like, now developers that would like to obtain a license to resell any property should have had paid 100% of the land value and injected at least 20% of the development cost in to an escrow account regulated by the government in addition to that any buyer purchasing a end unit would transfer his payment to the same escrow account that is regulated by the government to insure that his contribution is used in the actual development not to exit the developer.

These are examples of some of the regulations introduced in Dubai to avoid another burst in the real estate market and to address the issue with uncompleted projects I could keep on but the post is becoming long enough..

Hope that helps ease your mind

 

[1DXB]

In the latest articles in Gulf News & Emirates 24/7 they have quoted that property prices have increased only 0.6% in Q1 2014 vs Q4 2013 and sales transaction growth of 1.7% indicating a slowdown to realistic levels of growth. They have attributed the stabilization to the factors mentioned above as well as the mortgage caps recently introduced by the central bank.

Hopefully it indicates positive sustainable growth for the property sector for the coming few years!