New property law, falling share prices: double bonus for realty

Dubai Government has issued its long-awaited property law which experts predict will mean a strong increase in real estate prices that are well below those of comparable cities around the world.

The newly issued property law is as expected, and gives non-GCC expatriates the right to acquire Freehold and 99-year lease property in designated areas.

The new law will also allow expatriates who have already bought properties to register their titles with the Dubai Lands and Properties Department. In addition, GCC nationals now have the right to buy property anywhere in the emirate, opening up a new potential flow of funds into local property.

New buyers

Leading estate agents are on the record as predicting that a surge in buying will follow the new law. It is true that the missing legislation has held back some categories of foreign buyer and many expatriates will now feel more comfortable about buying.

However, the immediate impact of the new buyers will probably be most impressive in the re-sale market where the number of available properties is already somewhat short of demand. It remains to be seen whether renewed buyer enthusiasm will then overspill into the vast number of partly-completed apartments growing like mushrooms around the emirate.

By international standards - Dubai is surely a city that should be judged by world benchmarks - property is still very fairly priced in Dubai. Moreover, the constant flow of expatriates working mainly for multinationals these days’ means a lively rental market will always exist.

Thus investors who choose to buy good properties in the best locations will not go far wrong, but they should always have in mind that an oversupply in two to three years' time is likely to interrupt this long-term uptrend, and plan accordingly.