Dubai Strata Law will set a good example for MENA
IMF is predicting GDP will expand by 5.1% in the MENA region this year
Dubai’s Strata Law will be a model for other developing property markets in the MENA region, according to DAMAC Properties.
Dubai’s Real Estate Regulatory Authority (RERA) has introduced a number of changes to property regulations in the emirate, to boost investor confidence through transparency in the real estate sector.
“The regulatory and legal framework that now underpins Dubai’s property market is now on par with international standards,” said Niall McLoughlin, senior vice president, DAMAC Properties.
The IMF is predicting GDP will expand 5.1% in the MENA region this year, higher than the global forecast average of 4.2%.
The MENA region is expected to be second only to Asia in terms of annual growth, with MENA economies expanding at more than double the pace of advanced nations including Europe and the United States.
“Countries such as Saudi Arabia and Egypt are already making significant progress with regard to implementing regulatory framework to support growth in their respective real estate sectors," added McLoughlin.
“There is the potential for Dubai’s Strata Law to be used as a template for neighbouring countries, planning to introduce regulations that define multiple-ownership.”
The Land Department introduced Law No 27, otherwise known as the Strata Law in 2007 to regulate properties with multiple-ownership.
In April last year, three new directions asked developers to provide full details about all of their projects in Dubai, prepare Jointly Owned Property (JOP) Declarations, which includes information about internal floor space and share of ownership of common areas. The third direction outlines the framework for establishing Owners Associations (OA).
Last month, The Saudi Arabian Ministry of Commerce and Industry introduced new world class laws to advance the off-plan real estate market, by making it more transparent and accessible, as well as offering additional protection and services to investors and customers.
The new regulatory frameworks, including escrow accounts and a real estate register, have been put in place to ensure growth in real estate is sustainable and viable.
“Saudi Arabia is taking monumental steps to provide clear legal frameworks to advance growth in the property sector,” said McLoughlin.
“DAMAC Properties is also eagerly awaiting the issuance of the mortgage law, which will play an active role in stimulating local and foreign investment in Saudi Arabia’s real estate market.”
Egypt is also developing a mortgage finance law, which is expected to stimulate lending from financial institutions. Total mortgages represent less than half a percent of GDP in Egypt, compared to 14% of GDP in Morocco and more than 80% in Britain in 2008.
Swiss bank UBS AG’s Global Asset Management unit says it is “very upbeat” on the Middle East’s property sector.
UBS’s Global Asset Management chief executive officer told a conference in Saudi Arabia recently that Middle East commercial real estate offers a good long-term investment opportunity and that the region stands out “dramatically” alongside China as an investment destination.