By Staff writer
Real estate experts expect new regulations to have positive impact on property market in era of weaker demand
Real estate experts are expecting new property laws in Abu Dhabi to drive growth and have called for a measured response over the impact of the potential oil output freeze.
The effect of the recently implemented Regulation of Real Estate Sector in Abu Dhabi on financing and mortgage enforcement will be one of the core topics discussed at the upcoming Abu Dhabi Market Overview, taking place on the first day of Cityscape Abu Dhabi next month.
The new regulations place greater responsibility and regulation on developers which will help manage the risk of over-supply in the current period of weaker demand, experts believe.
The forum will also put a spotlight on the impact the potential oil freeze output deal may have on the real estate sector in the UAE capital.
Chris Taylor, CEO of Abu Dhabi Finance, said in a statement that he is confident that recent legal and economic developments in the capital will bring best practice into the capital's real estate, contributing to buyers' security and subsequently enhancing growth.
He said: "Increased clarity and transparency alongside centralisation of property and mortgage registration, the management of escrow accounts, and the creation of a mortgage law effectively reduces the risks involved in real estate transactions for all parties.
"Expat residents will be more likely to invest long-term in the market and non-resident customers will take great comfort from these new laws. The Property Law will lessen the impact of potential cyclical economic factors such as oil price movements on real estate prices creating a less volatile environment which should encourage continuous investment and growth of the sector."
Speaking ahead of his participation in the forum, David Dudley, head of Abu Dhabi Office at JLL MENA, added that he also believes the new regulations will bring many opportunities alongside higher financial security for investors.
"New regulations affecting escrow accounts, land and property registration, strata law, the licencing of real estate activity and new fees will help support a better regulated market as they will improve transparency and help protect consumers as well as investors," he said.
"The new laws place greater responsibility and regulation on developers, which will inevitably suppress supply growth. This will help reduce the risk of over-supply in the current period of weaker demand; however the key will be to allow sufficient supply to come through to maintain a healthy balance between supply and demand to keep rents and prices at a competitive level."
The Abu Dhabi Market Overview will also see experts debating the potential impact of recent oil output freeze on the capital's economy.
While oil price and production volumes have always been a key driver of Abu Dhabi's economy and real estate markets in generating a significant proportion of GDP, FDI, employment and consumer spending, Dudley also pointed to positive aspects of the current slowdown.
He added: "The good news is that demand growth continues from major capital projects that started when oil revenues were strong. Projects such as the airport expansion, the growth of Etihad Airline and other major tourism attractions, including The Louvre Abu Dhabi have an economic multiplier effect, ensuring continued GDP growth."