New law to extend Dubai property cycle, says developer

A government-owned property developer has argued that Dubai's new property law will add at least a year to the current property cycle.

Farhan Faraidooni, chief executive of Sama Dubai, told Reuters that the law, designed to clarify the rules for foreign ownership of Dubai property, had been "introduced at the right time".

Prior to the property law, the market was expected to see a period of correction thanks to an increase in supply.

However, speaking at the World Economic Forum he said people were being encouraged to invest in Dubai property from overseas after the law's introduction, helping to prevent a shorter cycle.

He explained that the greater certainty that comes with limited freehold ownership has led to an increase in the number of "institutional" investors.

A number of companies are now eager to see the government finalise the details of the new law to reassure those thinking of overseas property investments in Dubai.

The possibility of freehold ownership is expected to give a further boost to the Dubai property market, which has already exhibited strong signs of growth this year.

The Dubai real estate index operated by Standard Chartered Bank showed that property prices rose by 3.7 per cent and 1.6 per cent in January and February respectively.

Sama Dubai is the property development and investment division of government-owned Dubai Holding.

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23/05/2006

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