The 1st public auction of reclaimed mortgage properties is anticipated to be held the month after next at the Dubai Land Department Offices. Despite numerous statements claiming that there were no foreclosures in Dubai,we reported on this phenomenon at the beginning of 2009, but with no laws in place and numerous hastily produced new laws – at last some repossessions will – maybe – come to market. Navigating strict Sharia laws against money lending with interest and “unusual” private property laws seems to have been the delay. As interest cannot be charged, and no one in the past having dared not to repay a loan, it will be interesting to see how this plays out.
Abu Dhabi Finance has recently announced that they are reducing their interest rates to a minimum of 5.5%. This has been seen as a positive move by many of Dubai’s property agents who believe that if the Dubai banks follow suit it could lead to an increase in market activity. It is obvious that the key factor in business is cash flow and if the cost of a mortgage and maintenance is higher for the landlord than the rent he is receiving for the property, it undoubtedly causes inequality and restrictions for the market place. Furthermore it does not encourage future buyers to enter the Dubai real estate market. Currently the lowest available interest rate in Dubai is 7.5% which may not be allowing existing and new landlords to maintain or grow their business.
Yet more property related laws to be introduced in Dubai
According to “The National,” a major Dubai newspaper, Dubai is expected to release yet another set of laws governing the property industry. There is a growing number of disputes between small property investors and developers in Dubai and prices continue to fall. This is what The National has to say:
