Monthly views on Property Developers in Dubai have been steadily growing since May, a leading property portal in the UAE. Bayut has seen a combined traffic of five million views for its listings of properties in Abu Dhabi in two months. Many causes, including regulatory changes and the onset of a post-pandemic resurgence, can be attributed to this increase of interest. But most importantly, the most stimulating incentive for investors, especially on the back of softening rates, is the achievable rental yield. The Abu Dhabi market has posted an average gross yield of 6.8 percent, up from 6.6 percent in the previous year. This is remarkable because of the COVID-19 pandemic and its knock-on effects, given the muted economic growth and downturn in real estate markets around the globe. The view of the UAE government and industry associates, who have described real estate as a key catalyst for the overall economic growth of the country, is also confirmed by these figures. Their faith was evident in the scope of legislation announced to enhance a favourable regulatory structure aimed at further complementing the real estate sector and its sub-markets. And the most recent addition, for Abu Dhabi, to a new conflict resolution centre, is their way of showing that such support is a long-term commitment.
A dedicated dispute resolution centre has come into being following a joint agreement signed between the Abu Dhabi Judicial Department (ADJD) and the Department of Municipalities and Transport (DMT). This new department is now operating in Abu Dhabi to address rental and other real estate-related conflicts, according to sources.Such disputes were historically managed by the ADJD, when DMT was in charge of Tawtheeq, a tenancy contract scheme. The new conflict resolution centre is effectively an intermediary, tasked with facilitating reconciliation between litigants and helping to settle conflicts amicably. This proposal forms part of the broader ongoing reform of the national system of justice. A reconciliation agreement is drawn up and submitted to the judges for approval if the conflict is resolved at the centre. The case is then referred to ADJD for further hearing in the event that it remains unsettled. This poses the question: How does the industry at large benefit from it? The agreement between ADJD and DMT also applies to the creation, through training and accreditation, of a new class of conciliators, with the new centre facilitating the process. The new framework is expected to create a community of well-qualified and experienced conciliators in due course of time, who can add legislative value to the industry by protecting the interests of all stakeholders. The new centre also provides litigants with an opportunity to resolve arbitral disputes before going to court, which not only speeds up civil proceedings, but also decreases the pressure on ADJD and higher courts. This added judicial layer would further improve the protection of investment and thus enhance the competitiveness and attractiveness of the real estate sector in industry. And programmes such as this are crucial to encouraging prospective buyers in a market dominated by demand rather than supply. Initiatives promoting demand-side economics are seeking solutions even in the general surplus of the Abu Dhabi market, taking into account, in particular, that over 8,600 units are scheduled to be delivered in 2020.
Abu Dhabi's real estate market is primed for steady growth in the post-COVID economic cycle with the implementation of 'Gahdan 21', the accelerator programme of Abu Dhabi, gaining traction, and with the ambiguities around the freehold ownership law seeking clarification. The growth prospects are further supplemented by a stimulus package from the UAE Central Bank aimed at improving the financial market. The rise in the exposure of banks to real estate, along with a 5 percent increase in loan-to-value ratios for first-time buyers, could fuel many homebuying aspirations, particularly from the vast middle class segment. A main driver may be the new, decade-low borrowing rates, too. Moreover the relaxation of visa restrictions and the launch of golden visa citizenship schemes are proving to be a unique selling point, unparalleled by any other dynamic global industry, according to numerous research bodies. In fact the new residency visa is a testimony to the proactive strategy of the nation to draw global investors to migrate and live in the UAE, while continuing employment with international organisations. As remote work is becoming the new standard, this step coincides with a juncture. Such programmes have consequences for the Dubai Investment Real Estate, be it the new visa scheme or the new dispute resolution centre. The current sliding economy is also suitable for making systemic fixes, tying loose ends and setting up with minimal disturbances and repercussions, for long-term success. To that end, DMT and ADJD's reactive and collaborative initiative to create an added judicial layer is as timely as it is commendable.