Dubai's new law to regulate the sale of real estate still under construction is part of an effort to curb speculation that has sent property prices in the Gulf Arab emirate skyrocketing, an official said on Tuesday.
Under the law issued this week sales of off-plan properties in Dubai must be registered with the department before they can be resold, Marwan bin Ghalita chief executive of the Dubai Real Estate Regulatory Authority (RERA) said.
Standard Chartered Bank warned in July that Dubai's property market showed signs of overheating as speculators betting on quick gains inflate prices of units still under construction.
"It will help to curb speculation," bin Ghalita said of the new law.
"In Dubai we are introducing laws step by step ... Now everything is going to be transparent because it is with the Land Department."
Dubai property prices have surged 79 percent since the beginning of 2007, Morgan Stanley said earlier in the month.
Demand for real estate in Dubai, home to the world's tallest tower and three man-made islands in the shape of palms, has surged since the government first allowed foreigners to invest in properties in 2002.
The government passed a freehold property law in 2006 granting foreigners the right to own properties at selected developments.
The off-plan law follows the issuance of a mortgage law last week as part of a drive to regulate the Gulf Arab business hub's booming real estate sector.
It will also prevent master and sub-developers from charging transfer fees on off-plan sales, bin Ghalita said.
Developers however can be paid administration fees of 1,000-3,000 dirhams ($272-817) for each transaction after approval by the Land Department, he said.
Property prices will probably jump 35 percent this year and another 8.5 percent in 2009, when they are expected to peak as Dubai takes measures to weed out short-term speculators, a Reuters poll showed on Tuesday.
The analysts said property prices would fall at least 15 percent from peak to trough. (Reuters)For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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