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15 April 2024

Regulatory framework needed now

The UAE real estate market is going through a time of consolidation and correction. (MAGDY ISKANDER)

By Rami Eljundi

Legislative and regulatory frameworks must be put in place before the UAE real estate sector can establish itself as a structured asset class market for various types of investors and end-users.

This is the view of Gurjit Singh, Chief Property Development Officer of Abu Dhabi-based Sorouh Real Estate. "There are two things that must happen before the UAE real estate market can take off," he said. "One is to have a legislative framework and the other one is to have a regulatory framework, with both creating transparency and focus for investors.

"A lot of people who are involved in property development are going through a very challenging period. This will sharpen their ability to deal with consumers, financing, new legislation, transparency and regulations – and that will help to create a more accessible real estate market. Such a period is the best time to carry out changes," he said adding, the UAE real estate market was going through a time of correction and consolidation.

"It is not only the real estate market but also the construction side of things, the different players, the intermediaries, the consultants – all are going to see some measure of consolidation. If there was an over-concentration on the high end of the market then developers now need to see what kind of shift they must perform to cater for sectors, especially the affordable sector."

He said there was evidence of continuing demand among the mid-income segments of society whose members had a tendency to save and were well-positioned to purchase mid-market properties.

Last week's Future Capitals Summit in Abu Dhabi had emphasised the need to establish balance in the major cities of the future. This could be achieved by not only serving the top end but by catering to all sectors of the population.

"Sorouh is following the direction of the Abu Dhabi 2030 plan that emphasises the importance of affordable housing. But in terms of trying to fulfil the requirements of the plan the provision of financing for end-users is very important." He said prudent financial management meant Sorouh was well-placed to weather the challenges faced by the sector. "We have put in place a fundamental basis for funding our real estate developments through good cash management."