The current economic crisis has put a strain on all industries in both established and developing markets.The severe impact of the present situation has put substantial pressure on governments to react by implementing packages to stabilise and stimulate the economy.
The government of the United Arab Emirates has established an array of regulations and rulings to support the economy. In Dubai several measures have been taken in the area of property management.
A renewable residency visa is currently being developed by the government which is targeted at investors that are intending to buy freehold property.
A further target has been the off-plan market. The Real Estate Regulatory Agency (RERA) is determined to protect it from defaulting developers. It has ruled that developers must pay 100% of the land price. Only once they have done so can they proceed to sell property off-plan.
The Abu Dhabi real estate market is facing comparable difficulties with sellers and buyers failing to come to an agreement on property prices. The reluctance of banks to lend money results in a considerable lack of available finances keeping transactions to a minimum. The property market of Oman has also failed to escape this difficult situation.
The development of properties in these areas is in need of financial injections. Despite the oil-related revenues provided by the government, existing projects are slowing down. While the Central Bank agreed on a 10 billion US$ bond to assist in existing development plans only the future will show whether the majority of real estate developments can be kept up.
Regardless of the economic situation and the resulting difficulties for the real estate market, a number of opportunities are undoubtedly at hand for those who know how to make the most of them.
Dr Geoff Pound
Image: New regulations for property management but new opportunities for those who know how to make the most of them.
