Real Estate Sector
The main cause of unprecedented demand for property in Dubai and a sharp rise in property value was the lack of a unified framework for determining the value of property and valuation factors. However, after the crisis, the price of real estate in the Middle East and North Africa declined by almost 50%. Only the real estate market of Dubai total value of real estate assets declined by almost $ 100 billion, excluding land assets. C the purpose of stabilization and restructuring of real estate markets in the region, governments have introduced new rules, the main principle of which is the ability to accurately determine property prices. For example, permission to Government of Dubai for its citizens to sell received a gift of land at a price of 30% of the market requires the effective implementation of a clear mechanism for determining the cost. As a result of rapid price growth in the past three years, average cost of office space in the property market in Dubai has grown by over 110%.
Nevertheless, the crisis has made some changes and now, according to analysts, prices are once again returned to the level of mid-2006. Such sudden changes in market and demonstrate the need for a clear definition of real estate prices. Creating such a mechanism to determine prices complicates the fact that the number of concluded contracts on markets Real Estate Middle East and North Africa in 2009 and early 2010 was negligible, resulting in a shortage of information for comparative analysis of prices. In addition, the real estate market in Dubai were forced to rely on inaccurate information, rumors and information from the media because the official statistics of the market was not available. We also note that the absence of regular, accurate and professional evaluation real estate is the reason for the growth of financial risk for providing loans – banks and lending institutions, investors and business entities that own real estate with which they carry out their activities. Scope of Dubai real estate is becoming more mature and open, so to demonstrate their independence and objectivity of governments is vital to develop and implement common standards for evaluation Real Estate. Property to be sold without any destabilizing factors, potential buyers and sellers should act out of rational motives, without any outside pressure.
Government must play a key role in coordinating the market and introducing international standards of evaluation. And the leadership of the Gulf have already appreciated the importance of establishing a more professional procedures estimation. Pioneer in this respect is Dubai, where the Agency to regulate the emirate's Real Estate (RERA) has already introduced a number of initiatives to improve the quality of estimating the value of property in Dubai. The current situation in real estate market in the uae is characterized by a reduced level of activity of deals because of the uncertainty of investors about the future price level. Establishing a professional assessment system of property may be catalyst for the growth of confidence and transparency needed to restore the real estate industry in the uae.