Dubai continues to remain an attractive destination for investors due to its safe haven status, but mechanisms are needed to make it difficult for investors to flip properties as the realty market shows signs of recovery, a panel of experts said.
“Long-term investors generally look at yields, finance, demand and supply, cash flow against short-term investors who borrow money for quick profit. Developers not just need to study the profile of buyers and must put financial conditions that make it difficult to flip properties,” Fadi Al Said, Senior Investment Manager, Head of Investments, Middle East and Africa, ING Investment Manager, said addressing a seminar at Cityscape on Tuesday.
However, Dr Ryan Lemand, Senior Economic Advisor and Head of Risk management, Securities and commodities Authority, UAE, was of the view that residential flipping, which took place during the boom days, did good in the sense that it put Dubai on the world map and created all the buzz.
“Dubai is emerging out of the crisis… It has showed the world how to fight and adapt to crisis.”
In July, Emirates 24/7 reported that the Dubai Land Department had urged developers launching new projects to discourage investors from re-selling “off plan” properties unless the project has reached an advanced stage of construction.
“We don’t have any regulation to prevent people from reselling their property. The developer should discourage people from selling off-plan until the project has reached an advanced stage,” the department said.
Masood Al Awar, CEO, Tasweek, said the Dubai real estate market was maturing and has always remained an attractive destination.
“The emirate offers security, stability and quality… there is government support and this all is helping the market to revive.”
However, he warned that some developers had not learnt their lesson and were trying to leverage the investors confidence to make quick gains.
“These non-professionals need to be stopped from entering the market,” he emphasized.
On Monday, Jones Lang LaSalle (JLL) said that the recovery in the real estate market was more robust in Dubai than in Abu Dhabi. The consultancy said that Dubai was ahead of the curve as rents are finally starting to pick up while Abu Dhabi was yet to bottom out. In terms of sectors, retail remains a driving force with significant opportunities in both emirates.