Dubai Land Department Bid to Safeguard Investors in Project Revivals

Being recovered from economic downturn of year 2008-2009, Dubai property market had regained its momentum and heat in year 2013.  Steady recovery was observed in business and trade sectors in all major emirates of UAE. Especially, Dubai the business hub of Middle East has revealed several lucrative investment opportunities for local and foreign investors. Projects that had been paused due to unavailability of funds have been restarted again due to investors’ interest in stalled projects.

Before the recent regulatory bid investors who were willing to invest in stalled projects had to pay the price of land and related costs without paying amount that had been paid prior to pausing of the project. Dubai Land Department (DLD) has already cleared number of such projects which were stalled due to some reason.

 
Current essentials of investing in stalled Dubai property projects 

Having considered the losses which original buyers or investors had to face due to pausing of the project DLD has decided to take a new regulatory move to redefine the process of investing in stalled projects. Lack of funds is the most common cause of stalling of projects. The primary motive behind this movement is to secure original buyers or investors who have already invested in projects that were paused later. According to new regulation investors who are willing to invest in stalled projects, are required to clear off all unpaid payments for the project revival. This allows previous investors to receive compensation by new investors. The provisional bond is expected to play a major role to safeguard investor investing in Dubai properties. Dubai land department is taking great interest and leading this move to develop a regulatory process to protect investor’s rights.

Regulatory regime and rise in investment cost

While protecting investors this regulatory regime also increases the cost of entry for new real estate investors who are interested in investing in stalled projects. Investors have to clear all payments before reviving which they have received as legacy along with project. Despite high investment cost, project revival can be tempting for cash-rich investors. After considering the rapid market progress experts predicted that high cost will not stop new investments. Although, the process of reviving will require more time due to lot of paper work is involved. 

Effects on market stability

 
Ambitious combination of investor’s interest and temporary capital appreciation have brought residential sector of Dubai to critical stage. It is expected that market will continue displaying growth in terms of price and development. Continuous progress can limit market instability. However, unreasonable enthusiasm or lack of finances could destabilize the market. According to latest estimates prices of single family homes including villas, townhouses are the average of prices in first and second quarters in year 2008. For condominiums or apartments, prices have risen up to 23 percent in year 2013.

Estimates showed that more than 100 high-rise projects were stalled by downturn of late 2008. Dubai authorities supported developers by funding them to revive their projects on their own and having funds not enough developers were allowed selling their projects to those who could revive the project. To provide security to investors state regulatory authorities like Dubai Land Department have implemented regulations especially those who are investing in paused projects.

Dubai is believed to be the business and trade hub in the region of Middle East. Combined efforts of Government and developers have played major role to develop city image. Especially, Dubai property market has been recognized as hottest investment sector on international levels  

Angela Davis:

Angela Davis is a passionate and an experienced writer and social media consultant. She always try to produce unique and stimulating content for their valuable readers.