The heavy down-payment regulations are the biggest hurdle for prospective home owners in the UAE. Market experts are divided in their opinion on whether new legislation has targeted the wrong people.
“To curb speculation and the forming of a property bubble by raising fees and capping mortgages has also dramatically slowed down the motivation for owner occupiers to take the plunge. I would have used similar methods to cool the off-plan market, but not be so stringent with buyers who could demonstrate that their property purchase was for ‘living in’ purposes,” suggested Mario Volpi from Ocean View Real Estate.
Industry leaders also suggest that first-time home owners can be incentivised to buy property by lowering registration fees and increasing the LTV for mortgages.
Meanwhile, others call for more clarity on different fronts. “Where more clarity would be required is towards owning property and acquiring residency. There has been a lot of ambiguity on this from the start and having clarity on this would certainly add to the confidence,” said Niraj Masand from Banke International.
Another grey area is the implementation of the Strata Law and how common areas in freehold buildings are managed. “The ability of owners to manage their own building is of fundamental importance in the smooth running of affairs within the property. The investor protection law is another that needs clearing up. This law should, once ratified, give a clear picture of buyer’s and developer’s obligations to each other,” said Volpi.
There is also an industry consensus for more oversight of the secondary market. Similarly, there are no regulations to provide support if the borrower faces bankruptcy and is forced to default. “Secondary market regulations have been refined over the years, however, rules regarding off-plan market still require clarification, particularly if the developer delays completion of the property,” Nazia Zaidi from Chestertons pointed out.
In the same vein, Cluttons’ Faisal Durrani sought regulations on property flipping. “While some developers have already begun the process of self-policing themselves and restricting off plan re-sales until certain construction or payment milestones have been reached, or in some cases, until handover, government rules around this would be welcome.”
Investor demand surges in Sharjah
Sharjah had recently opened up plot sales to non-Arab expatriates in a newly launched master community off Emirates Road. Freehold sales in the emirate had been limited to GCC and Arab nationals. Tilal City offers end-users and investors an opportunity to get a slice of the Sharjah residential market on a 100-year lease basis. Cluttons is providing the sales and marketing support for this project to Tilal Properties.
“We are already recording strong demand from the investment community in the UAE. There is pent-up demand from UAE-based expats who have been unable to access the Sharjah property market. As the government continues to ease restrictions on foreign ownership, developers are increasingly turning their attention to gated communities to match the developments in suburban Dubai. The emergence of such freehold schemes will pave the way for investors looking to enter a market where average home values are roughly two-thirds lower than that of Dubai,” said Cluttons’ Faisal Durrani.
Events to be staged at the DWTC, comprising diverse sectors including construction, energy, technology, beauty, food, healthcare, environment and automotive, will mark the emirate’s post-pandemic economic recovery
Local business2 months ago