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Iceberg, right ahead!
The real estate market seems to been taking on water, but what can be done to prevent from completely sinking? Life belts at the ready…
January 24, 2011 3:09 by Eva Fernandes
Take for instance the frustrating business that is the strata law, which RERA wanted to be very firm about implementing. Despite being introduced in 2007 and enforced in April 2010 with a six month deadline, the strata law appears to have been blatantly ignored by many. The law is a welcome attempt to give joint owners more rights for their properties, so that issues like maintenance could be better handled. (And Lord knows they needed to be better handled: Kipp reported mid last year on the poor residents of Lake Point Tower in Jumeirah Lake Towers who had been left without air conditioning after a dispute between the landlords and the property developers escalated.) But a lack of participation by many owners means an unsuspecting buyer in a shared building could walk straight into the bills that fellow owners are ducking. This is, of course, yet another reason not to buy here.
Then there’s the UAE’s changing rule on residency visas. At the height of the boom, many agents promised their investors a long term residency visa in exchange for the purchase of property. The unfortunate few who jumped on the bandwagon with the express intention of retiring in the Emirates found much to their dismay that the carpet had been yanked from under their feet; apparently the visa was no longer valid which left many high and dry and understandably bitter. The National reports the results of a recent poll conducted by law firm Hadef & Partners that found that out of 500 people (including buyers, lawyers and brokers) 88 percent said “more flexible residence visa options for owners-investors” would aid in the recovery of the sector. Currently residency visas are granted for a period of six-months only and can be renewed by exiting and re-entering the UAE for Dh.2,000. Experts say streamlining the application process and extending the visas to two years would help encourage investors.
Given real estate’s track record, current prospects and visa complications, is it any wonder that investors are wary of entering the UAE market? But while the real estate sector is over supplied and isn’t expected to recover any time soon, Kipp thinks there is scope for the government to lend a helping hand by straightening out legislation. We understand the market is still immature, but that’s all the more reason to take significant steps to lay out firm accountability and streamlined processes. It may just keep the whole thing afloat.
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