Dubai to tighten property rules?

Dubai is mulling tightening rules on the property market in the Gulf financial hub after many developers shelved projects because of the global financial crisis...

The real estate authorities are expected to issue new regulations aimed at helping avert delays and cancellations that have marred the once-buoyant sector, lawyers briefed on the changes were quoted as saying.

Buyers would be required to pay a developer 30 per cent of the property price as a deposit, with the remaining 70 per cent paid in installments linked to stages of the development, the daily reported.

Developers would also not be allowed to start selling units in a property until 20 per cent of the planned project has been completed, Lisa Dale, Head of the property department at Al Tamimi law firm, was quoted as saying.

"This will ensure only the most feasible projects go forward," she said.

Dubai, a member of the seven-strong United Arab Emirates Federation, opened its property sector to foreign investors in 2002, triggering a real estate boom later boosted by windfall revenues from oil prices that hit an all-time high in July 2008.

The emirate's steadily rising population and investor speculation on the sector contributed to a surge in real estate prices.

But the international financial crisis and ensuing credit crunch has capped the ability of some developers to complete projects and limited buyers' access to loans, resulting in a property market slowdown.

Source: Middle East Online