Unlike few years ago where the spotlight was on the GCC for property investment due to high capital growth rates, the spotlight has since shifted to elsewhere in the world. The UK and the US have become more popular now due to their attractive prices and the weakening of currencies. Properties in the Far East have also seen good capital growth after a short sharp fall towards the end of 2008. Even Australia has seen capital growth in the past two months because of low mortgage rates. Most of these countries have managed to revive their local property markets due to a combination of low interest rates and government policies.
To bring the spotlight back to the UAE, the government will have to implement new regulations to make the market more transparent. Developers have to keep management and service charges, district coolingÂ and other miscellaneous charges at the lowest level possible. On the mortgage front, the cost of mortgage payments per month compared with renting the same property is edging closer and is much needed to reinvigorate the property market. Improved mortgage conditions will lead to higher transaction volumes.
However, the most important thing now is perhaps not to focus on the real estate sector, but rather on how to achieve growth in the economy. The government has to look at policies that will help companies expand. hings such as making the law more lenient for the setting up of companies, reducing set-up cost and government fees to make UAE more competitive globally, as well as helping companies gain access to cheap financing,Â so that they canÂ look at expanding . Only by helping companies expand and create more jobs in the local economy can be achieved increase in demand for housing and commercial space, which will help absorb the new supply entering the market.