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Mazaya Monthly Real Estate Report -
Week 2 - May 2016
UAE
This week’s Al Mazaya Report touches
upon the move in the real estate
market, in Abu Dhabi, to adjust the
tempo of the real estate market and
blockade brokers' malpractices. At a
time where the real estate market is
going through a level of modification
at the level of both developers and
financing channels, it will now not be
permissible to offer real estate projects
for sale or offer projects in real estate
exhibitions without obtaining the
approval from the Municipal Affairs
Department and opening an escrow
account. In this context, the emirate
is awaiting the application of a lease
indicator before the end of 2016, which
will set an average costing for rental
units in housing areas. The indicator
is divided into 237 points and would
be binding to both the landlord and
lessee. Judicial bodies will also rely
upon the indicator, with the courts able
to assess rentals based on the detailed
information the indicator will provide.
Relying
on
and
applying
the
measurements from the indicator and its
outputs would put an end to the problems
facing lessees who are often faced with
substantial, unjustified increases in
rentals – year after year. The indicator
will also help investors designate areas
to launch relevant projects. It is planned
for this indicator to take effect following
the complete enforcement of the real
estate regulatory law. This law will
regulate the activities of developers,
brokers, real estate appraisers, and the
registration of real estate units and leases.
Al Mazaya’s Report points out that the
most active real estate markets, in terms
of new projects, high demand and real
estate events, are those where brokers
increase their activities and grow their
ability to influence whenever demand for
residential, commercial and investment
real estate products go up. However,
their ability to influence goes down where
contracts and deals are executed at the
level of real estatedevelopment companies
or through reliable real estate companies
with a proven track record in the field of
real estate marketing, promotion and deal
execution. This, in turn, leads us to believe
that real estate markets are becoming
more stable and will benefit whenever
contracts and deals are executed via
official frameworks and by official means.
It is worth mentioning here that the ability
to regulate the market and brokerage
businesses depends increasingly on the
end beneficiary, who is obliged to close
the deals in official frameworks, avoiding
violations. It has become difficult to track
and fully control working mechanisms and
tools of brokers given the development
in the tools they use; this includes
unlicensed brokers who often promote
their available real estate units online.