Wednesday, July 30, 2008
Dubai’s real estate sector still lacks transparency despite efforts to clean up its image, property and investment management company Jones Lang LaSalle said yesterday. Dubai’s real estate market now ranks as a tier three, or semitransparent market, up from a tier four, or low-transparent market in 2006. Dubai still has a long way to go before it can catch up with other global real estate markets, but it’s improving more quickly than BRIC (Brazil, Russia, India, and China) economies. Tier one real estate markets, which include cities such as New York and London, are classed as highly transparent, while tier four, or semi-opaque markets, include Middle Eastern countries such as Saudi Arabia, Oman, Kuwait, Qatar and other UAE emirates such as Ras Al Khaimah and Fujairah. Syria, Sudan and Algeria rank as tier five, or opaque markets. Dubai is at the center of the Gulf region’s construction boom triggered by the introduction of foreign ownership rights in 2002. In recent years, Dubai has tried to tighten up its real-estate regulations in a bid to attract more foreign investors from places such as the UK, Russia and India. Jones Lang says improved transparency has led to a 12-fold increase in sales activity in Dubai since the freehold property law was introduced. The emirate now has the most transparent property market in the Middle East and North Africa region, and the world’s most improved between 2006 and 2008, the property firm said. The value of real estate transactions in Dubai has risen from 38.7bn dirhams ($10.6bn) in 2002 to 462bn dirhams in 2007, according to the Dubai Lands Department. DLD estimates that the value of transactions will rise to 717bn dirhams in 2008. This isn’t just a flash in the pan. Dubai has been steadily improving. We are confident that by 2010 Dubai will be in the tier two of countries.