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29 March 2024

Property investors, believe in your dream but do homework first: Rera

Published
By Parag Deulgaonkar

Dubai real estate market is picking up and offering good returns to investors, according to Real Estate Regulatory Agency’s (Rera) chief.

However, his advice is that investors still have to do their homework well before they invest.

“The market is doing good and picking up again. My advice to all new investors is to do your homework well although there are rules and regulations in place,” Marwan bin Ghalita said on Monday after inaugurating Deyaar Development’s new branch in Business Bay.

“It’s not all on the regulations and the law… it’s on the [buyer] themselves, so he should know what he wants. Dubai is growing and investors are getting good returns…there is opportunity for newcomers. They should believe in their dreams, but they have to do their homework before investing.”

In May 2012, Dubai Land Department issued a Code of Corporate Governance that outlines the responsibilities of a developer and ensures that they disclose recourses and alternatives available for prospective investors in case of a delay in completion and handover.

“The code has been shared with all developer and it is being implemented slowly among them. It will take time to implement.”

He added that one of the objective of Rera was make as many as developers possible to work like listed companies, which are transparent and corporate governance in place.

The draft code suggests that all developers will have to appoint a dedicated investor relations officer who will deal with enquiries of institutional and individual property investors.

Besides, in terms of investor protection, Dubai is also working to issue a Real Estate Investor Protection Law. The law allows investors to get full refund if the developer fails to complete or handover a property within a certain timeframe or deliberately defrauds an investor or alters the specifications of the unit without obtaining requisite permission.

Little speculation is OK

Asked if Rera was planning any new law to curb speculation, Ghalita said: “Developers had introduced their own measures to limit practices such as flipping, but a certain amount of speculation is acceptable. If we say 10 to 20 per cent, speculation, it is always OK for the market.”  

He added: “Developers have taken are enough measures. If you go to Emaar nowadays you cannot sell until you pay 40 per cent, and with Nakheel you give the post-dated cheques. The mechanisms, the developers are putting in themselves to stop this speculation - I think it’s working now.”

A recent report by Deutsche Bank said property prices in Dubai saw a 6.2 per cent growth in the first three months of 2013, though apartment prices remain between 43 and 61 per cent below peak prices.

Knight Frank, a global property consultant, said property prices in Dubai rose 18.3 per cent in the past one year (March 2012 to March 2013), with the emirate maintaining its position among the top five best performing real estate markets in the world.