- Broker Directory
- My Tools
- News & Advice
- Market Trends
- Other GN Sites
The decree issued by the President of the UAE to regulate real estate sector in Abu Dhabi is a step in the right direction that will protect investors from manipulation and make the real estate sector more attractive to foreign investors, analysts said.
President His Highness Shaikh Khalifa Bin Zayed Al Nahyan, in his capacity as the Ruler of Abu Dhabi, issued the law on Wednesday.
The new law specifies in detail the jurisdictions of the Department of Municipal Affairs (DMA) regarding all real estate issues such as the preparation of a real estate register to save all data relating to any real estate development.
Under the law, a project guarantee account will be created, to be opened by the developer for each project upon approval from the DMA to deposit all amounts paid by the buyer of real estate units. This aims to protect the rights of buyers in case the units are sold as off-plan property.
“This is a step in the right direction in regulating the Abu Dhabi real estate market. It is an important decree and very much needed,” said Mohammed Ali Yasin, managing director of National Bank of Abu Dhabi Securities speaking to Gulf News.
He said that Abu Dhabi does not have an official body to control the property market unlike Dubai where the Real Estate Regulatory Authority (RERA) is established.
“So far people had no option but to approach a court to file a complaint if they had any problems with the developer on projects that are delayed or half built. The new decree will make Abu Dhabi more secure for foreign investors and enhances transparency in buying and selling between the developer and the investor,” Yasin said.
He added that the new law does not state clearly, however, whether people have the right to complain on projects that were not completed after the 2009 financial crisis or whether the law only pertains to future projects.
“There are developers who collected money from investors and have no intention to start the project. Bad practices by some developers have hurt Abu Dhabi property market,” he said.
The new decree is not expected to have a major implication on the pricing of projects as that is still controlled by supply and demand, among other factors.
Similarly, Jerry Oates, general manager of Asteco Abu Dhabi, a real estate services agency, said that the law will improve transparency in the emirate’s real estate sector.
“I think anything that puts together more transparency for developers and investors alike has to be good for the market,” he said.
Oates added that more details need to be released on the law to give investors and developers a better idea of what it entails.
Meanwhile, developers in Abu Dhabi said the law will boost the industry and increase demand for property.
Abu Baker Al Khoury, chairman of Aldar Properties, stressed the significance of the law — which was put together by government entities, developers, owners, and investors — saying that it covers all the different angles relating to the sector.
He also said that Aldar has seen an increase in demand lately, expecting the new law to boost demand even further.
Another Abu Dhabi-based developer, Bloom Properties, said it had been anticipating the decree for some time.
“As far as Bloom is concerned, we had already started implementing a lot of its contents in our previous sales. Clarity was awaited on the direction the decree is taking. Now that we have it, we think it’s going to give tremendous confidence in the market and it’s going to help developers progress with their launches,” Sameh Muhtadi, chief executive officer of Bloom, told Gulf News.
He said that both local and international investors will benefit from the decree.
“By definition, it’s providing maximum transparency for investors in terms of provision of information, tying payments with progress, and everything that helps build confidence,” he said.
Source: Fareed Rahman, Senior Business Reporter and Sarah Diaa, Staff Reporter, gulfnews.com