Rich Experiences in the UAE's Freehold Real Estate Market with Local and Foreign Investments

Properties - Agencies
A unique and bold experiment in the United Arab Emirates in the real estate market has yielded successful and unique results. The laws and regulations governing freehold ownership for non-citizens in the UAE represent a unique, successful, bold, and advanced experiment when measured against the time in which they were enacted, and when viewed within the framework of long-term investment and comprehensive development aimed at achieving sustainability across all economic sectors capable of doing so, The decisions on freehold ownership for non-citizens had the greatest impact on making the Emirate of Dubai the top real estate destination in the region as a result of its early implementation of freehold laws in specific areas.

Foreign Ownership
This was also significant in bolstering confidence in Dubai as an attractive location for real estate ownership, while these decisions had a direct impact on raising the level of confidence among investors and property owners, and real estate developers were able to market their projects within a framework of legislation and laws that protect the rights of all parties.
The decisions did not stop at the real estate sector but extended to the financial markets, where non-citizens were permitted to own certain shares in publicly traded stocks. Additionally, foreigners were allowed to own stakes in insurance companies, These decisions were primarily aimed at serving the national economy, aligning with global economic changes and international trade agreements, and opening up to global markets.
Al Mazaya Holding’s weekly report noted that the trend toward freehold ownership for non-citizens is proceeding at a measured yet accelerating pace, the latest development being Abu Dhabi’s authorization of freehold ownership in certain locations, based on the freehold law in specific investment zones designated by the government.
Consequently, the decision allows foreigners to purchase and own all residential, commercial, and tourism units designated by the government.
Real Estate Investment
Through this decision, the Emirate of Abu Dhabi aims to attract more investment to the real estate sector and other economic sectors, and to restore balance between supply and demand, as the real estate market in the emirate has so far been characterized by supply outpacing demand.
Consequently, the ownership decisions are intended to increase demand and reduce supply, while the decision will have a direct impact on the continued implementation of current and planned projects, as ownership decisions work to increase demand rates in the medium and long term across all sectors. The decision is also expected to provide major real estate development companies with a greater opportunity to enter the market and attract substantial investments in the coming period.
Residential Units
The Weekly Benefits Report states: The real estate market in the Emirate of Abu Dhabi—as in the rest of the UAE—has recorded a decline in demand rates as a result of the crisis’s repercussions. Demand for residential units in investment projects has reached low levels, falling short of expectations.
This is due to the lack of incentives that would boost investor demand, and the rise in prices of residential units on the market has contributed to lower demand indicators, as projects implemented during that period targeted high-income groups, featuring high-quality construction and finishing specifications, which negatively impacted demand rates as well as market and project liquidity.
Real estate market indicators in the Emirate of Abu Dhabi highlighted the need for real estate development companies to refine their operational mechanisms regarding ownership, leasing, and sales, as well as the need to offer real estate products that are financeable through the various financing channels operating in the market.
Meanwhile, real estate development companies were required to focus on projects that meet the requirements of a broader range of investors, rather than focusing on high-quality, high-priced projects, if they wished to revitalize the real estate market and reduce the gap between supply and demand.
Real Estate Financing
It is worth noting here that the real estate market has faced a significant decline in liquidity due to financing channels tightening their criteria for providing real estate financing, given the high investment risks in this sector.
The Al Mazaya report confirms that real estate activity in the UAE is accelerating through the launch of more projects of varying sizes and objectives that meet all types of demand and development requirements.
The Emirate of Dubai accounts for the largest share of real estate projects currently under construction and those in the planning stages, as the emirate is witnessing a concentration of investment in the tourism and commercial sectors, and a large number of projects are expected to be completed.
Expo 2020 projects are expected to contribute to accelerating the pace of construction for specialized real estate projects, with the cost of building the exhibition and its accompanying infrastructure estimated at approximately $7 billion.
According to MEED magazine, many contracts were awarded in 2013 by local developers, and numerous contracts are expected to be awarded this year.