Ownership rules and the mortgage market in Dubai

    

In
2002 the government of Dubai
created freehold property zones in the city. For the first time foreign
individuals could own property in the freehold areas of Dubai. This has resulted in an unprecedented
boost in the real estate market leading to massive construction projects that
are among the best in the world. The new law was established in order to
enhance the confidence of property buyers in the legal system. The legislation
was intended to attract foreign investment through international developers
that always prefer to work in countries where the laws are straightforward and
keeps things simple. Before the law was passed foreign nationals could only get
a 99-year lease at a maximum but it was only since 2002 that they could actually
own property in the freehold areas of Dubai.
Another good thing about the legislation is that it helps to support 80% of Dubai's population, made
of non citizens, to rent out the property and lead better lives. Freehold
property owners in Dubai
can rent out their property on 99-year leases of their own.

 

According
to the new laws people looking for buying property in Dubai will now have outright ownership of the
construction as well as the land below it. There will no going back between
freehold and leasehold. The new Dubai
property law means that you can register the property under your own name with
the Dubai Land Department. The best part of all this is that the Dubai Land
Department uses the latest technology to manage everything so there is no need
to worry about endless paper work and fussy rules and regulations. Everything
is designed to work smoothly for everyone. Before 2002 the buyers kept a
contract of the sale from the developer that allowed them to transfer the
ownership only through the developer. The contract included an agreement that
the freehold property would be granted as the freehold title as soon as it was
ready. The new law says that the title deeds can be handed over the owners a
lot sooner.

 

A
huge impact of all this can be seen in the mortgage market because of the high
rate of construction and property trading going on in Dubai. The resale market
is boiling hot and international banks, especially Standard Chartered Bank, are
vying to enter the market to offer financial loan options. Hitherto the same
institutions were unwilling to enter the market because of legal uncertainties.
It is now fully expected that many banks are going to aggressively enter the
market and lower the mortgage cost and offer highly competitive prices and
several new services. Introductory discounts are going to make a huge
difference to the mortgage market. It has generally been noted that the lower
the cost of the money the higher the price of property. One of the reasons for
high rates of property in the world is the low cost of money.

 

The
new law will make it sure that there will be many new buyers because of
financing available and there will be a lot of movement in the mortgage market
with people switching to better lenders.

Article Source: http://www.superarticle.com/