Dubai property,

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Dubai likely to tighten property market regulations
Thursday, January 08, 2009
With several developers withdrawing their projects in wake of global financial meltdown, Dubai is considering tightening rules on property market, say recent reports.

As per a report in The National, the real estate authorities are likely to issue new regulations to help avoid delays and cancellations that have shattered the once-buoyant sector.

Once the new regulation is passed, buyers may be required to pay 30 percent of property price to the developer as a deposit, and the rest 70 percent payment could be made in installments, based on the stages of development.

Developers too, will not be permitted to begin selling units in a property, until 20 percent of the planned project has been completed, as this would ensure that only the most feasible projects proceeds further, revealed Lisa Dale, the Head of Property Department, Al Tamimi Law firm.

Being a member of the seven-strong UAE Federation, Dubai welcomed foreign investors into its property sector in 2002, which triggered the real estate boom through windfall revenues generated from oil prices that touched an all-time high in July 2008. The ever-growing population and investor speculation in the emirate further contributed to surge in property prices.

However, the, international financial crisis and resulting credit crunch has cut down the ability of few developers to complete projects, and this coupled with limited access to loans by buyers’, has resulted in property market slowdown.