Monday 25 January 2010
Good regulations lead to solid market
The property markets of the Emirates have been hit hard by the global recession, but the financial pain has been made much worse by the lack of an adequate regulatory framework.
During the boom, developers were allowed to launch projects with nothing but a small registration fee, an artist’s rendering and a sales team. Buyers were allowed to obtain home financing of up to 97 per cent of the cost of a property and many of them bought more than one apartment they could not afford as speculative investments.
Now those risky moves are coming back to haunt both sides. Legal disputes have multiplied between banks, developers and buyers.
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I do hope that they will introduce a proper system in the UAE for banks, developers and the people. In Europe, there is competitions for developments and only the best wins. This ensures that everything is linked together, there are roads, hospital, well, infrastructure in general.
ReplyDeleteWhether we like it or not, the past few years have illustrated how necessary a "regulatory framework" is needed to protect all parties from the excesses of unregulated markets!
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