New regulations mean expat residents will be more likely to invest
Abu Dhabi’s new property law is set to boost growth in its real estate market, industry experts said ahead of next month’s Cityscape exhibition in the UAE capital.
The effect of the recently implemented Regulation of Real Estate Sector in Abu Dhabi on financing and mortgage enforcement will be one of the core topics discussed at the upcoming Abu Dhabi Market Overview, to be held on the first day of Cityscape Abu Dhabi.
The forum will also put a spotlight on Abu Dhabi’s economic drivers, its residential market capacity, and the impact a potential official freeze in oil output may have on the real estate sector.
Chris Taylor, CEO of Abu Dhabi Finance, said that recent legal and economic developments in the capital will encourage best practice in the emirate’s real estate sector, with numerous factors contributing to buyers’ security, and subsequently enhancing growth.
“Increased clarity and transparency alongside centralisation of property and mortgage registration, the management of escrow accounts, and the creation of a mortgage law effectively reduces the risks involved in real estate transactions for all parties,” he said.
Expat residents will be more likely to invest long-term in the market and non-resident customers will derive comfort from the new laws, he added. “The property law will lessen the impact of potential cyclical economic factors such as oil price movements on real estate prices creating a less volatile environment which should encourage continuous investment and growth of the sector.”
David Dudley, international director and head of the Abu Dhabi office at JLL MENA, also noted that the property law would ensure higher financial security for investors. “New regulations affecting escrow accounts, land and property registration, strata law, the licencing of real estate activity and new fees will help support a better regulated market as they will improve transparency and help protect consumers as well as investors.”
Abu Dhabi’s new laws place greater responsibility and regulation on developers, which in turn will suppress supply growth, Dudley said. This will help reduce the risk of over-supply in the current period of weaker demand.
“However, the key will be to allow sufficient supply to come through to maintain a healthy balance between supply and demand to keep rents and prices at a competitive level.”
At the Abu Dhabi Market Overview forum, experts will also debate the potential impact of a possible freeze in oil output. Although oil prices and production volumes have always been a key driver of Abu Dhabi’s economy and real estate markets, Dudley points to positive aspects of the current slowdown.
“The good news is that demand growth continues from major capital projects that started when oil revenues were strong. Projects such as the airport expansion, the growth of Etihad Airways and other major tourism attractions, including the Louvre Abu Dhabi have an economic multiplier effect, ensuring continued GDP growth,” he said.
Cityscape Abu Dhabi runs from April 12-14 at the Abu Dhabi National Exhibition Centre (ADNEC).