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A proposed new law is being discussed which could have far reaching consequences for the Dubai real estate market!

Developers potentially will not be allowed to apply for permission to sell off-plan property unless the land in question has been 100% paid for by the developer or development company! Furthermore, consent by RERA (Real Estate Regulatory Authority) permitting developers a license to sell off plan property will not be granted unless 20% of construction is achieved at the submitting of license stage - there will then be fixed construction targets in twine with investors payment plans to further control and regulate the market.

Oliver Hickey Managing Director of Nexus Development Ltd said, “While I whole heartedly applaud the Dubai government for their conscious decision to safeguard future investors, I have to question the timing of such an announcement, given that overseas property investments have been universally hit hard by the current financial crisis. I think that the introduction of such laws, although borne out of the need to both protect and reassure investors, could ultimately have a short term detrimental affect on the Dubai real estate market. Dubai is home to the world’s fastest growing population and now in its infant years it should be encouraged and allowed to grow.

The general consensus of opinion in statutory circles is that these laws will be passed as they stand. It seems that the Dubai government is keen to show that they are conscious of the fact that they have been too lenient on developers, something which has become clearly apparent as the world fights the recession. The Dubai government wants to right the wrongs and it appears its official stance will now be at the other end of the spectrum.”

Dubai has been the shining light of the overseas property markets for countless years. Ridiculed at first, tolerated later and then until recently revered. A combination of vision, funding, speed and ability to deliver, have all played their part in this Middle East oasis. Dubai was the last great bastion to be hit by the credit crunch and with that in mind it would take a brave person to bet against Dubai being the first to recover and to realise its vision of the future.