Investment Properties in Dubai? Wait and See

Thinking of buying an investment property in Dubai? Wait and see is our best advice right now. The credit crunch is having a big impact in the UAE, and particularly in Dubai, where many ex-pats went to work in the construction and real estate sector, only to discover they had 30 days to find another job or get out of the country when their job vanished along with the rest of the credit market.

A new law is being proposed which will allow a longer residency period without being employed. 6 months is the time frame on the table. But, and this is a big but – this will be yet another untested law and Dubai has been unsuccessful with most of their hastily written laws recently. A good example being Law 13 – supposedly to protect small investors unable to complete their end of the bargain. This is what the law stated:

1. In the event that the purchaser defaults on any term of the contract he made with the developer for the sale of the Real Estate Unit, the developer should notify the Department accordingly and the Department will then give the purchaser 30 days notice to fulfill his contractual obligations, by hand,
registered post or email.

2. If at the end of the period referred to in item 1 of this Article the purchaser has not fulfilled his contractual obligations, the developer may cancel the contract and repay the purchaser his money less a deduction that does not exceed 30% of the monies paid by the purchaser.”

Quite clearly “30% of the monies paid.” But  RERA chose to interpret this law to mean “30% of the contract value,” meaning most small investors unable to complete are losing all their deposit.

So, if you are thinking of buying an investment property in Dubai,  we suggest a “wait and see,” approach. Wait and see if a few ex-pats who have been fired are actually allowed to stay for 6 months afterwards. Caveat Emptor.