Dubai came 49th and Abu Dhabi 53th in a transparency index of 102 global real estate markets.
The new table – which measured real estate markets, most of them national, based on the ease with which property could be bought, sold and valued – ranks Dubai and Abu Dhabi as retaining their places as the top two markets in the Middle East and North Africa.
When the study was last conducted in 2012, Dubai ranked 47th and Abu Dhabi came 52nd out of 97.
“The UAE has retained its position as the most transparent real estate market in the region, although there has been little further progress made over the past two years,” said JLL, the property consultancy that prepared the index.
Overall, the UAE placed behind countries including India, China, Botswana and Thailand in the index.
Libya came bottom of the table of the 102 countries surveyed, preceded by Senegal and Myanmar.
JLL said that Dubai, which had featured among its “top improvers” in previous surveys “appeared to have lost some impetus” and to have been ”treading water” over the past couple of years.
The assessment comes despite the Dubai Land Department putting forward a series of measures aimed at improving the legislative and regulatory environment in an attempt to avoid another real estate bubble. These include a doubling of property transfer fees last year, the announcement of unified real estate contracts and a move by the Central Bank to introduce loan- to-value ratios on mortgages.
The report found that Abu Dhabi had a more regulated planning system than Dubai and the quality of real estate was higher than Dubai in several sectors, reinforcing Abu Dhabi’s position as the second most transparent market in the Mena region. However, the report found that there had been “disappointingly little progress elsewhere” in the region.
“The Middle East and North Africa remains one of the least transparent regions in the world,” JLL said in its report. “Following encouraging signs of improvement in transparency prior to the global financial crisis, the region has not maintained momentum.
While there is increasing recognition across Mena of the importance of improving real estate transparency, in most cases this has failed to translate into firm action.”
The Dubai Land Department was unavailable to comment when contacted by The National, while Abu Dhabi's Urban Planning Council declined to comment.
A partner in real estate at the law firm DLA Piper said the emirates would benefit from updated property laws.
“The fact that both Dubai and Abu Dhabi have not improved in the rankings in this report probably reflects the fact that there has not really been any new real estate legislation enacted in the emirates over the last two years,” Duncan Pickering said.
“In Abu Dhabi the market has been expecting five new real estate laws since 2007 or 2008 on issues such as strata title, an interim register of off-plan sales and escrow accounts. In Dubai there are also laws which have been proposed but not enacted yet,” he said. “And there are a number of issues surrounding successfully implementing existing legislation.”
Mr Pickering said transparency attracts investors by reducing perceived risk.
“International investors take a global view and compare lots of different markets when they are deciding where to put their money,” he said. “They are usually attracted to markets which have higher levels of transparency so that they can reduce risk. At the moment this is a very competitive market with lots of countries attempting to attract that cash.”
JLL singled out Qatar, placing the country on its global top 10 improvers list alongside Zambia, Serbia and Colombia.
The improvement came after Qatar announced a new “open data” policy earlier this year which involves plans to release a large quantity of government held, non-personal data to residents and to improve public access to the land registry and other real estate data.
Countries were given a composite score based on 115 individual data points and questions for each market. These were based around each country’s transaction processes, regulatory and legal transparency, governance of listed vehicles, the amount of reliable property market data available and the way in which property performance is measured.
The United Kingdom retained top spot in the global survey, followed by the United States and Australia.
JLL said that over the past two years, it had noted an improvement in transparency from more than 80 per cent of the markets it surveyed as developing countries attempt to attract inward investment to their real estate markets.
“The world’s dominant commercial real estate markets are in better shape than at any time since the Global Financial Crisis of 2008-09,” JLL added. “Levels of capital markets activity are returning to pre-crisis levels and real estate investors are moving up the risk curve into new geographies and property types. Meanwhile, corporates are now executing long-term portfolio strategies and selectively extending their footprints into emerging markets.”
“As momentum builds across the global real estate markets, investors, developers and corporate occupiers are demanding (and expecting) ever greater levels of real estate transparency – in terms of legal and regulatory enforcement, financial disclosure, fairness of transaction processes and access to high-quality market data and performance benchmarks.”
lbarnard@thenational.ae
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