It’s quite evident that Dubai “the destination” is materializing day by day. Supported by Government initiatives, new legislation, economic reform and clear direction while fused by abundance of liquidity, the market is getting nearer to the start of a new cycle where more emphasis on value and sustainability are key.
While Dubai has been viewed as a safe, welcoming city that offers affordable luxury offering great beaches and sunshine with decent temperatures for 7 months of the year; Dubai has been seen as a city that sits between east and west while offering a better lifestyle than any of the surrounding cities; This all has been great for years however a lot more is taking place now. One of the best infrastructures in the world. Ease of doing business, the biggest man-made Safari, an iconic opera house, the biggest indoor theme park, the region’s largest inflatable water park, the world largest mall, the world largest Ferris wheel, hundreds of themed malls and outlets, some of the best exhibitions in the region, an improving health care system with ambitious plans, campuses for some of the best universities in the world, global financial centers with independent English language common law judiciary courts, successful free zones, the biggest airport in the world, one of international renowned zones for trading commodities such as tea, some of the best airlines in the world and much more.
Dubai the destination is the smart city in progress.
Below are some legislation that relate to the real-estate market while supporting other sectors of the economy.
· One of many, regulating the short term rental market has a great impact on the general economy as well as the real estate market. Two of the direct benefits are first on tourism as it allows the city to attract tourists that viewed Dubai as an out of reach destination in the past, while allowing every landlord to access a giant market that was out of their reach in a regulated way.
· Regulating mortgages is one of the most important steps taken, it helped prevent the market overheating, as well as limited the ability of individuals to get the wrong exposure to real-estate which in its turn supports the stability of banks in the long run.
· Supporting sustainability with several initiatives from government entities including land department. Such initiatives are supported with bigger R&D budgets available day by day. This is expected to be a new driver to spark innovation and support future global interest from organizations as well as individuals.
· Investor protection law, with its several benefits to the economy. Sentiment damage due to developer’s inadequacy is limited. This legislation changes the whole cycle from design to construction and then getting the property into the market.
· Regulating the long term rental market along with several initiatives that followed to make living more affordable, and make it more feasible for multinational organizations to pick Dubai as their headquarters. This creates a whole cycle as the availability of international key tenants, supports the development of key commercial assets which are scarce in the market, and attracts international buyers mainly funds or HNWI who are always on the search for key income producing assets mostly with one tenant.
· Strata law and the amendments that followed and some that are still expected which sets the road for avoidance of conflict of interest in most communities as well as sparks an atmosphere of competitiveness which is always healthy.
· Repossession law and activating auctions and foreclosures as well as the latest bankruptcy law support the economic cycle.
We will discuss in the coming article introducing regulation for a better more transparent lease to own approach, Time share and approaching lending in a friendlier way to none residents as well as removing monthly income as a main eligibility criteria, and how will this impact our market’s future.