Sharjah is in the final stages of drawing up a law to allow Arab nationals from non-GCC countries to own property in the emirate.
Current laws permit only UAE nationals and citizens of other GCC countries to own property in Sharjah, while other Arab nationals need to get clearance from the emirate's authorities.
At present, several people from other countries reportedly own property in Sharjah in the name of UAE nationals, which is against the law. The new legislation, which seek to tackle this issue, will be issued soon, Emirates Business has learnt.
The emirate's consultative council is studying the possibility of allowing non-GCC Arabs to own residential apartments, but not the land, provided the ownership expires once the building is demolished for reconstruction or laws are revamped in the public interest.
Sources from Sharjah's real estate industry told Emirates Business a number of developers have, in anticipation of the new decisions, already sold residential and commercial units in their buildings to various Arab nationals without the proper documents and contracts. They added the new owners have made initial advance payments and would approach finance companies and banks when the new laws are announced.
Some of the units sold are in the Khalid Lagoon and Al Mamzar lake areas, Al Nahda, Al Majaz and Al Qasimiya areas, which are expected to be covered under the laws permitting non-GCC Arab ownership.
The laws will also mean the inflow of fresh capital into Sharjah's real estate sector.
Khalid Al Suwaidi, CEO of Al Mamzar Properties, said it was expected billions of dirhams will flow into the emirate's economy in the form of realty investments.
Also, this will encourage Arab residents to seek the services of real estate finance companies, which will translate into a broader client base for such companies in the Sharjah, generating both employment and profits. The people eligible to buy property under the proposed laws will also rid themselves of the burden of paying monthly rents, which have gone up by 10 per cent a year for the past several years, Al Suwaidi said.
According to several reports, Sharjah's residential building sector attracted
Dh6 billion in investment in 2006. The first quarter of 2007 also witnessed the opening of 15 new hotels in the city, bringing the total to 89 in all categories. The emirate's population, meanwhile, grew by eight per cent in 2007.
Obaid Al Tunaiji, of Al Tunaiji Real Estate, said that for two years now, Arab nationals have already owned apartments in the emirate, though on a limited basis.
An investor or building owner would collect names of Arab tenants together with copies of their passports and the nature of residence in the country to later obtain approvals from the Sharjah real estate registration office, which in turn would inform the authorities, he said.
Allowing Arab nationals to own apartments in Sharjah would also push up the price of real estate in the emirate, Al Tunaiji said. If ownership was confined to only the residential units, rather than the land on which they were built, the price of land would increase by ten to 20 per cent. If ownership of land, whether residential, commercial or industrial, was also allowed, however, the increase would be anywhere from 30 to 40 per cent, he said.
Saeed Al Awadhi, Director General of Dubai's Unesco Real Estate Brokers, said the anticipated law will greatly revive the real estate market in Sharjah and benefit more parties – from the government to landlords and consumers. He denied, however, that allowing Arabs to own property in Sharjah would have a big effect on Dubai's real estate sector.
He ruled out the possibility that investors would shift in large numbers from investing in Dubai's real estate market to Sharjah and cited the higher return on investment in Dubai and its lead in real estate laws and legislations as reasons for this.
Al Awadhi also said that the biggest beneficiaries will be UAE nationals and other GCC citizens, who will be able to develop more projects and change the nature of the realty market and allied services in Sharjah. It will open the door for investors to work on comprehensive residential and commercial compounds, he added.
Zulfiqar Mohammed, Director-General of the real estate section at Kuwaiti Real Estate Company, said Arabs were allowed ownership in some but not all areas of Sharjah and this has not affected the real estate market so far.