United Arab Emirates: 15/03/2006
Thumbs up to new regulations
By Saifur Rahman, Business News Editor - Gulf News
Dubai: Industry officials yesterday hailed the new property law issued by His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, saying the Government has stood by investors who have purchased properties within the freehold communities.
Shaikh Mohammad yesterday issued Law No. 7 that legalises freehold ownership of land and property to UAE and GCC citizens, while allowing the same rights to non-GCC expatriates to pre-designated areas that will be approved by the Ruler of Dubai.
"It is the visionary guidance of Shaikh Mohammad that has prompted the issuance of the Dubai Real Estate Register Law. It is a testament to a pioneering emirate and one that keeps its promises to the people," Mohammad Ali Al Abbar, Chairman, Emaar Properties, said in a statement.
"The law sets out the legislative framework for freehold real estate ownership in Dubai. It confirms the right of UAE and GCC Nationals to own property anywhere in Dubai and makes provision for foreigners to own real estate in Real Estate Areas designated for that purpose. It reaffirms what Emaar introduced with the launch of Emirates Hills in 1999. As the first project in Dubai or anywhere in the region, that offered a unique opportunity for nationals and expatriates to purchase land and build their dream home, Emaar broke new ground with a concept that had never been tried before.
"The Government of Dubai has stood by investors who have purchased property within Emaar communities. The issue of this law further reinforces Dubai's commitment to investors in the region and internationally and encourages more investors to look at property purchase within the emirate, as a stable and long term investment.
Documentation
"We will work with the Dubai Land Department on the documentation and procedures required for registration of ownership for our investors and will be converting the necessary documentation in due course."
The law includes 11 chapters comprising 29 articles covering the issues of definitions, general rules, the implementation system of property hold, and the jurisdictions of the Dubai lands and properties Department.
It also stipulates the setting up of a property registration office at the Dubai Lands and Properties Department. This office will be responsible for documenting property rights and their amendments. Its records hold the ultimate evidence against all without exceptions. Its records cannot be challenged except in the case of forgery.
The law comes at a time, when Dubai's freehold property market is undergoing a correction phase, with prices coming down to a more realistic level, market sources told Gulf News. However, the new law will boost the market in a big way as many new investors were holding their money, awaiting new law.
The law is expected to boost the price of residential units in the freehold market, which has been softening over the last few months.
"Dubai Islamic Bank welcomes the announcement of a real estate register law. We believe that this law will contribute greatly to building investor confidence, especially among expatriate home buyers," Saad Abdul Razzak, chief executive of Dubai Islamic Bank, said.
"We also expect the law to give a boost to the secondary market in real estate. This is a development to be welcomed, since it will be another sign of growing confidence and maturity in the market.
"The law is a positive development, and will be another key element in the Dubai's emergence as a mature and prosperous economy."
The law comes nearly four years after the government first announced freehold ownership to expatriates, grouped under three Dubai-government owned entities - Emaar Properties, Nakheel and Dubai Properties. More than 13,000 expatriate families have already moved to their new homes, without securing title deeds in their names.
The new law paves the way for the expatriate homeowners to register their properties in their names with Dubai Lands and Properties Department, which has been gearing for the rush in registration.
Positive development
Arif Naqvi, chief executive officer of Abraaj Capital, said, "Abraaj Capital welcomes the announcement of a Freehold property law. We believe that this law will contribute greatly to building investor confidence in Dubai, especially among expatriate investors.
"As the manager of one of the region's largest real estate private equity funds, Abraaj Capital sees this development as very positive, and one that will give a boost to the secondary market in real estate. This development is another sign of the growing confidence and maturity in the market.
"The law is a positive development, and will be another key element in Dubai's emergence as a mature and prosperous economy."
A number of international real estate funds are expected to enter the market, who were watching the development of Dubai's property market. The absence of the law held many investors back, who will now bring in more liquidity to tap the market.
Dubai is the first emirate in the Gulf to open up its real estate for foreign ownership in 2002, at a time when repariated Arab capital was looking for investment opportunities. Despite the absence of a law, investors pumped money into freehold projects, based on their confidence on Dubai Government's committment.
As a result, a New Dubai was built on both sides of Shaikh Zayed Road and beyond. The new law only formalises and legalises them.
AT A GLANCE
Freehold ownership of property legalised
UAE Nationals: Freehold ownership and 99-year lease anywhere in Dubai.
GCC Nationals: Freehold ownership and 99-year lease anywhere in Dubai.
Non-GCC expatriates: Freehold ownership and 99-year lease in designated areas.
Freehold home-owners: More than 13,000 (7,000 more this year).
Freehold locations: To be announced later.
Property/Title registration: Dubai Lands Department.
Land registration/transfer fees: To be announced shortly (Currently 2%).
Property prices: Expected to go up.
