Property investors in Dubai adopting a more cautious approach post global crisis

The global crisis has resulted in a more cautious approach in Dubai where many investors watched property values fall by up to 50% and led to an increasing number of disputes, according to agents.
 
‘Clients have serious concerns over the security of their real estate investments. Further, increase in number of real estate disputes is a result of many prospective buyers seeking legal advice prior to making a transaction,’ said Mohanad Alwadiya, managing director of Harbor Real Estate.
 
‘This was not the case in previous years which also contributed greatly to the problems that clients were facing as proper due diligence was not conducted prior to the sale and purchase of property,’ he added.
 
Real Estate Regulatory Agency (Rera) recently proposed a free legal advice service for buyers and sellers. This is expected to boost confidence levels in the real estate industry.
 
Elsewhere in the Gulf region new rules are being considered to make the real estate industry more transparent and secure.
 
For example, in Qatar a new law is currently being drawn up to regulate real estate agencies and property developers. Individuals freelancing as property brokers and companies not licensed to carry out real estate transactions will be taken to task once the new legislation comes into force.
 
The aim is to set up an association of real estate agents which would additionally help to regulate the property market and rid it of illegal and dodgy operators. It will also help with valuations.
 
Officials said the new rules are needed and confirmed there has an increasing number of cases of fraud committed by firms doubling as property brokers.
 
A new finance law is due in Saudi Arabia soon aimed at boosting the mortgage market. The kingdom’s real estate market suffers from the fact that there are many would be buyers who are currently put off by the lack of mortgage products available.
 
Mohammed Al Jasser, Governor of the Saudi Arabian Monetary Agency, said earlier this month that the proposed bill would become law within the next few months.
 ‘
It will be a qualitative jump in the way we finance housing in the country and in the way we use financial instruments that are linked to the housing market,’ he explained.