UAE Property Market Boom

UAE has seen an unparalleled boom in its Dubai real state sector and has been an epicenter for property investment in the entire GCC region. One of the most competitive countries in the world, UAE is widely known as a business haven owing to its business-friendly atmosphere and laws. The key factors to have catapulted UAE’s property market to the current soaring heights are influx of expatriates, thriving tourist industry, and proactive government policies.

Of all the emirates of UAE, Dubai has been the most active player in the real estate sector among others. Dubai has witnessed the fastest upward trend in property prices and rents because of the increasing demand/supply imbalance – huge demand and short supply has resulted in the astounding price hike for the existing and ready-to-move-in properties. Continuous delays in the supply of new property have triggered a sharp increase in all the available residential and commercial properties. However, a look into the development projects which are afoot in Dubai, both residential and commercial property oversupply can be foreseen after a couple of years. The supply deficit signals huge opportunities for the developers to cash in on the prevailing real estate situation.

Despite quite a good deal of supply, office space is still facing shortage in Dubai. The demand for high-end office spaces is multiplying as the businesses go on to mushroom in the city, but the supply isn’t just adequate so as to satiate the demand. The flourishing tourism industry, of UAE in general and of Dubai in particular, has not only caused the boom of local hotel industry, but also resulted in large-scale retail developments. Shopping has become one of Dubai’s most potential lures and the sprawling malls are soon to become overcrowded if the proportion of population surge and development projects remains at the current level.

The struggles to undo the demand/supply mismatch are afoot throughout UAE and newer development projects are being initiated. Moreover, governments are drafting legislations that are more business-friendly in order to boost investors’ confidence in the market. Granting foreigners the right to own property in many of UAE’s emirates has also contributed to building up investors’ confidence in the region.

Property Ownership in UAE

Basking in the warmth of the Persian Gulf, the Middle East houses the United Arab Emirates (UAE) which is made up of seven sovereign states aka emirates, namely: Dubai, Abu Dhabi, Ajman, Fujairah, Ras al- Khaimah, Sharjah and Umm al- Quwain. UAE is home to a unique amalgam of Islamic and western culture that produces a wonderfully modern country offering something to all. With its modern cities teeming with world-class facilities such as super-luxurious hotels, marvelous recreational destinations, and mouth-watering shopping places, UAE has become a major tourist hotspot and a prime relocation destination for world’s peoples.

The year 2002 brought a sweeping revolution in the Dubai Property sector when the foreigners were allowed to buy freehold property in the UAE for the first time ever. The very year marked the onset of the UAE property boom that has only gained momentum with the passage of years and till date shows no signs of slowing down. It was in Dubai that the property freehold decree was first issued by crown prince General Sheikh Mohammed bin Rashid Al Maktoom. The laws that followed further reinforced the ability of foreigners to own a freehold property in Dubai. The other emirates to follow suit were Ras Al Khaimah and then Ajman which allowed freehold property ownership in 2004.

In the remaining emirates of UAE, foreign ownership laws vary. In Sharjah, freehold ownership to expats is not allowed – instead, the emirate allows 99-year leaseholds to the foreigners. The same law exists in Abu Dhabi along with 50-year renewable surface ownership agreements. On the other hand, Umm al- Quwain prohibits the ownership of land but does allow property ownership. Fujairah is preparing a legislation regarding freehold rights which, it is hoped, will grant complete property freehold rights to foreigners.