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In
March 2006 the government of Dubai implemented a new property law, Law
Number 7, which is expected to boost all sectors of Dubai's real-estate
market. It allows foreigners freehold ownership rights in Dubai
property such as condo hotels.
While it's expected that the residential market will benefit most from
the change in the freehold and lease-hold laws, properties such as
condo hotels may also see a surge in sales, now that one of the last
objections to investing in Dubai property by non-nationals has been
eliminated.
In
March 2006 the government of Dubai implemented a new property law, Law
Number 7, which is expected to boost all sectors of Dubai's real-estate
market. It allows foreigners freehold ownership rights in Dubai
property such as condo hotels.
While it's expected that the residential market will benefit most from
the change in the freehold and lease-hold laws, properties such as
condo hotels may also see a surge in sales, now that one of the last
objections to investing in Dubai property by non-nationals has been
eliminated.
The Dubai government announced its intention to change property laws in
2002, which stimulated foreign investment into designated freehold
projects developed by three state-owned real estate groups -- Emaar,
Nakheel and Dubai properties.
But until this law was passed, non-nationals with ownership stakes in
Jumeirah, Jbel Ali, and Dubailand areas had no legal autonomy over
their investment. Most sale contracts, however, already stated that
freehold titles would be granted as soon as the law was put into
practice. Now, foreigners will be given the deeds to their land and can
register ownership with the Dubai Lands and Properties Department. They
are also able to transfer property ownership directly without having to
go through the developer.
Analysts agree that since foreigners with a stake in freehold
properties felt secure in their ownership rights even before the new
law was put in place, its affects on the commercial real-estate market
will be minimal.
Residential real-estate prices - which have remained below those in
comparable cities - are expected to surge once international investors
become aware of the freehold ownership law and can feel more secure
because they'll be receiving a formal legal deed when making their
investments.
The new law will likely bolster secondary real-estate markets also such
as the mortgage sector. The insecurity of foreign ownership rights was
deterring international banks from entering Dubai's mortgage market,
which has remained uncompetitive as a result.
Some firms offer residential loans that are guaranteed by the property
developer-such as Amlak Finance's and RAKbank with mortgage rates of
7.5 percent 6.9 percent respectively, but interest rates have remained
high since conventional mortgages are secured with a deed of ownership. |
