Dubai has been ranked the Middle East and North Africa’s most transparent real estate market, but the region continues to lag behind others globally, according to a new report by Jones Lang LaSalle.
Transparency levels have increased in 80 percent of the region over the last two years, with the Lebanese real estate market showing the greatest improvement, the consultant said in its 2012 global real estate transparency index.
“More needs to be done to increase the level of transparency of the market both in Dubai and across the broader region, particularly in respect of investment performance indicators and data on market fundamentals,” Craig Plumb, head of research for Jones Lang LaSalle MENA, said.
“The lack of progress on these areas in recent years has contributed to the low level of investment activity and the oversupply that is currently being experienced in some sectors of the market.”
Transparency levels are expected to improve in the next few years as policy makers recognise the importance to both foreign and regional investors, added Plumb.
Dubai, hit hard by the global economic downturn, which saw real estate prices decline by over 60 percent, has introduced several measures aimed at better protecting investors.
Investors in theory will be able to seek full refunds if a developer fails to provide a unit or service within a specified time frame, according to a proposed investor protection law announced in April.
Dubai was ranked 47 out of 97 countries globally based on a range of performance measures including market fundamentals, regulation and transaction progress. The emirate was closely followed by Abu Dhabi at 52.
Neighbouring Gulf states Bahrain (63), Saudi Arabia (64), Kuwait (67), Qatar (72) and Oman (74) continue to trail the UAE.
Egypt was the only market globally to experience a decline in transparency, Jones Lang LaSalle said.
“Progress following the revolution of 2011 has been extremely slow and the vacuum created by the lack of a constitution is adding to the present sense of uncertainty and lack of transparency,” noted the report.
“The deterioration in transparency has been manifest in areas such as financial reporting, property taxation, uncertainty of planning regulations and lack of clarity of land title,” it added.
The US topped the global survey while Sudan was ranked least transparent, according to the research.