In a bid to make its real estate market transparent and in par with global property destinations, Dubai plans to launch a real estate performance index that will help investors across the world track and evaluate the market’s performance and property price. Apart from that, it also enables a more open sharing of data and strategy. This is revealed by the Dubai Land Department (DLD). The index is expected to go live by 2018.
This is the latest of several initiatives that the DLD has introduced to help Dubai deliver a more transparent market and increase the level of inward investment into the Emirate’s real estate sector. Currently, there lacks a real estate performance index for those who look to benchmark the performance of their assets, the new initiative is expected to cater to this requirement.
As per recent global surveys, Dubai has been ranked as the most transparent real estate market in the Middle East and North Africa region. Additionally, it moved up several rankings in global transparency surveys and also in the area of market data. Dubai has also moved closer to the top of the ‘Semi-Transparent’ category, where it sits on par with Tier 1 cities in BRIC countries (Brazil, Russia, India and China), and all four of the fast-growing MIST economies (Mexico, Indonesia, South Korea and Turkey).
DLD has introduced some initiatives over the past few years to bring about transparency in the residential and commercial property markets that include:
This portal was launched by the Real Estate Investment Management and Promotion Centre in order to attract investors for off-plan projects. It provides guidelines on best practices and gives investors and businesses access to investment opportunities through smart devices. Apart from this, it also gives the ability to make online transactions through the government portal.
This service increases the transparency of the rental market by providing rental property price data to both tenants and landlords. RERA’s website (www.dubailand.gov.ae) provides a rental increase calculator for determining the legally permissible increase in rent. The maximum increase permitted is 20 percent against the rent index. A property would have to be undervalued by over 40 percent for a 20 percent rent increase in order to be legally applicable. This index applies to commercial and residential properties and is updated every year.
In October 2014, RERA launched a service charge and maintenance index for freehold areas. The index provides details of 300 projects in 22 master developments and gives a clear break-up of the charges approved.