A step in the right direction
With property prices skyrocketing, the market has been abuzz with rumours that Dubai is heading towards another property bubble. However, new regulatory changes that have been announced in the past week should help assuage some of those concerns.
The Dubai Land Department (DLD) has announced a new Rental Dispute Settlement Centre, which will look after rental disputes between landlords and tenants. While it might not appear to be a drastic measure for investors, it will definitely help in promoting greater transparency in the market.
The department has also announced that it would double the transfer fee on each sale as a measure to protect the rebounding property market from speculators. It is aimed at stopping people from making a quick sale to make a small profit.
Meanwhile, H. H. Sheikh Mohammed Bin Rashid Al Maktoum, vice president and prime minister of the UAE and ruler of Dubai, has issued a law, clearly defining the role the DLD plays. The department will now also be responsible for drawing up policies and plans that are in line with the development of the emirate's strategic plan to regulate and develop the property sector.
Dubai has also become the first property market in the world to support international property measurement standards (IPMS). These are being developed to address problems created by multiple measurement standards.
The emirate is taking steps to work on rules that can protect the realty market. Sheikh Ahmed bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, said that the last property bubble was the result of a global financial crisis. However, he added, "We are working on our regulations. Sometimes, I don't see that [high property prices] are a good thing. We don't want Dubai to become an expensive city."
Market Insight is aimed at examining the emirate's dynamic market and forecasting industry trends. Dubai's realty sector is still relatively young and while these announcements are great news for the market, this is just the beginning for regulatory changes that are bound to be implemented. We hope that our round-up of stories and expert opinions has helped you get a better idea of the risk factors in the market, but also the measures that are currently out there to protect investors. Be sure to catch our next issue to know more about the latest in industry trends.