Recent initiatives unveiled by the UAE aim to enhance the country’s property sector and attract further investment, building on the significant growth experienced last year.
Earlier this month, the Dubai Land Department introduced a smart rental index featuring a one to five-star classification system for residential buildings. Additionally, the UAE Central Bank announced that banks would cease financing registration and real estate broker fees starting February 1.
In a move to bolster its real estate investment appeal, Dubai has also allowed property owners of all nationalities in the Sheikh Zayed Road and Al Jaddaf areas to convert their ownership to freehold status. A total of 457 plots are eligible for this conversion, including 128 on Sheikh Zayed Road and 329 in Al Jaddaf.
Siraj Ahmed, partner at Cavendish Maxwell, emphasized that these policies create a balanced environment for sustainable growth, offering new opportunities for investors and reducing financial risks for banks. The freehold status is expected to catalyze a transformation along Sheikh Zayed Road, with older buildings from the 1970s to early 2000s being redeveloped.
Dubai’s property market remains robust, with real estate transactions reaching Dh761 billion last year, marking a 20% increase compared to 2023. The number of transactions rose by 36% to 226,000, with a record 2.78 million procedures completed, including rental agreements.
While the average residential prices in Dubai surged almost 20% year-on-year, the Central Bank’s directive may raise upfront costs for buyers, complicating acquisition for small investors. Buyers will need larger down payments due to the inability to finance registration and broker fees, increasing liquidity requirements alongside existing property down payments.
Additionally, Abu Dhabi has rolled out its first residential rental index to enhance market transparency, and the upcoming Etihad Rail service is set to reduce travel time between Abu Dhabi and Dubai to 30 minutes, facilitating movement across regions.
Key Recent Initiatives:
Launch of Dubai’s smart rental index with a comprehensive classification system.
Allowing freehold status for property owners on Sheikh Zayed Road and Al Jaddaf.
Directive from the UAE Central Bank halting financing of registration and broker fees.
