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Wed 17 Oct 2007 01:10 AM

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More real estate regulation required

CITYSCAPE: Regulatory change would increase flow of capital in region's real estate market, expert says.

More regulation will increase the flow of capital in the region's real estate market, according to an industry expert.

"The market is supported by regulatory change and also by an increase in infrastructure," said Duncan Macaulay of the Real Estate Finance and Securitisation group at Credit Suisse.

Asked about the timeframe of real estate regulatory laws passed in Dubai, Macaulay explained that it is happening "in different paces and jurisdictions."

"The regulatory authority will facilitate growth that is envisaged," he added, speaking at the Cityscape real estate expo in Dubai on Tuesday.

However Dubai's newly formed real estate watchdog warned against taking measures that 'overregulate' the market.

"If you put too much red tape nobody will come to you," Real Estate Regulatory Authority (RERA) CEO Marwan bin Ghelaita said in an interview at Cityscape.

Dubai government took steps in July to regulate the emirate's real estate industry with the establishment of RERA and issuance of Law No. 8 of the Trust Account services.

The authority said on Monday it is issuing a by-law in two weeks that will lay down how property developers advertise in the media.

Under the new law, developers will be required to display on their adverts details of a RERA registration number, the escrow account used to receive payments and registration details of the agent overseeing the sale.

Both developers and media outlets will be held responsible for printing ads that do not comply with the new rules, Ghaleita said.

The government's Land Department has said it is taking strides to promote regulations that will contribute to the development of Dubai's real estate market.

Since its establishment, RERA has been overseeing policies, regulation and registration within the industry, which is one of the major drivers of Dubai's economy.

The move has been welcomed by the industry, which has been long-awaited a comprehensive legal system and detailed legislation to build a sustainable real estate industry in the long-term.