Dubai has proved to be an exceptionally popular hotspot for property investment in recent years, with domestic and foreign investors snapping up opportunities. Now, a new law which could provide better protection for the rights of these investors is awaiting approval from the Emirate’s courts.
A draft version of the Real Estate Investor Protection Law is currently before the courts and waiting to be approved, according to an official from the Dubai Land Department (DLD). DLD Senior Deputy Director Duaa Issam Dablan, speaking to the Dubai Real Estate Business-to-Business (B2B) conference, said "We had issued the draft law in the media and we got a lot of feedback. We then fine-tuned the draft law and now it’s waiting for approval from the Diwan."
Under the law, investors would receive significantly greater protection in cases where they find that their money has been placed with an unscrupulous investor or one that has simply failed to deliver on its promises. Emirates24/7 claims that if a developer has deliberately defrauded an investor, or if a developer fails to complete a project and hand over the property within a specified time frame, the investor will be entitled to receive a full refund under the new law. Investors will also be entitled to their refund if the developer decides to change the specifications of the property during the course of development without having first obtained the necessary permissions.
At present, Dubai is among the most popular real estate markets around, especially among international investors who are looking to maximize their returns. In the past few years, property values in the Emirate have been soaring, and this has contributed to some of the highest returns seen anywhere in the world. This, in turn, has driven significant increases in the volume of investment being poured into Dubai’s property market, with the first half of 2014 seeing a 50% increase in a market which was already a firm favourite. This saw more than 113 billion AED (£18 billion) worth of property in Dubai sold to investors over the course of those six months.
Investors in the region are experiencing growth levels of up to or beyond 20%. This is far in excess of growth seen in other property markets or in most other asset classes around the world, so it is little wonder that investors are being more and more drawn to the Emirate. While some have concerns about how long such growth will remain sustainable, Dubai has seen consistent property growth for some years running now and, learning from the mistakes of 2008, the government are taking steps to soften any correction. The region is more popular with investors from further afield than with locals, but nonetheless domestic investors have hardly failed to notice the opportunities on their doorstep.
With more and more investors at home and abroad putting their money into Dubai properties, the move to provide those investors with greater protection will surely be welcomed.