Dubai to protect overseas investors
Buying a new property in Dubai might not be as risky a proposition as it once was thanks to a new law expected to come into effect in June.
The “Investor Protection Law” will force developers to deliver properties on time with all the common facilities, such as swimming pools and gyms, ready for use on delivery of the property. The law will also prevent developers from selling property until at least 20 percent of the construction is completed.
Following the global economic downturn of 2008 many investors were left out of pocket as a large number of the emirate’s dazzling building projects came to an abrupt end. According to recent estimates there are more than 600 major building projects in Dubai where construction has stalled due to a lack of finance. The new law will allow buyers to cancel their contracts of sale and obtain a full refund if a developer fails to meet its obligations.
It is hoped that the new law will help to rebuild investor confidence in Dubai, which has faced criticism in the past when developers failed to deliver projects on time, or handed over properties that didn’t meet the agreed specifications. Previously owners didn’t have much control and had to place their trust in the good faith and strength of the development company.
The new law comes on the back of a 2.3 percent increase in Dubai property prices at the end of 2011. Whether it makes the emirate an investor’s paradise as it was before the crash remains to be seen, but it’s clear that those at the top are eager to get the construction industry moving again.
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