New property law Grants freehold rights to foreigners - Property Boom expected next year.
Dubai | By Saifur Rahman, Staff Reporter Gulf News | 16/07/2005
"The government will issue the new federal property law by the end of the year. However, according to the UAE constitution, individual emirates are allowed to adopt their own property laws, giving the country the needed flexibility.
"What we hear is that Abu Dhabi will follow the federal law, but is expected to grant freehold ownership of property to UAE and GCC nationals and 99-year leasehold to foreigners.
"Dubai, however, will allow freehold ownership to foreigners in selected areas of land, masterplanned by some government-owned entities.
Dubai allowed the sale of "freehold" properties in 2002, which triggered solid investment in the emirate's real estate sector. Investors began to pour in money as developers, benefitting from high liquidity in the market, began to cash on the new opportunity.
The market took an almost vertical upturn last year when speculators began to influence price of Dubai's real estate to a large extent. However, with the growth of the stock market, property prices began to stabilise this year.
The market is expected to witness another boom early next year.
"Dubai's property market is in the process of stabilising. It is the beginning of maturity. With the enactment of the new law, we expect another boom to take place in Dubai's property market as mortgages will become more accessible and people who are still hesitant to invest due to the absence of the law, will begin to invest."
Currently Nakheel, Dubai Holding and Emaar Properties are allowed to extend property ownership to foreigners. They have created masterplanned lanscapes for individual developers to build apartment complexes and towers a trend which, developers said, will continue.
While Dubai Holding and Nakheel are government entities, Emaar is 32.5 per cent owned by Dubai government with the rest being held by the public.
Dubai's model, which ensures controlled participation by the private sector in government-designated areas, is expected to be followed by other emirates.
Abu Dhabi has begun the process through Aldar Properties, which recently rolled out its first batch of properties, with many more in the pipeline.
Following Dubai, Ras Al Khaimah and Ajman are also opening up their markets. Sharjah, on the other hand, was one of the first emirates to offer foreign ownership of properties to GCC and Arab expatriates a trend which it is continuing.
