The New Mortgage law in Dubai: What you need to know!

The New Mortgage law in Dubai: What you need to know!

If you were to carefully review the new mortgage law in Dubai, one thing becomes crystal clear; it is aimed at strengthening the real estate field in UAE. The new law paves the way for more foreign investment in the city. The reforms don’t just end there as the new law supports “alternate funding methods.”

“By developing Dubai’s Mortgage Law, we will help real estate organizations to operate in perfect harmony and enhance their smart resources to provide the best possible services to the customers and create strong new investment tributaries.” Said  Sultan Butti Bin Mejren, Director-General of Land Department

Hence, we can derive three major motives that Dubai is trying to achieve

1. Bring in more foreign investment into Dubai
2. Strengthening foreign relationships with major international institutions
3. Make it easier for public listed entities to own land in Dubai

With that said, the laws also serve the purpose of bringing more structure to Dubai’s Mortgage system. The key takeaways are:

• The mortgage will be only issued by a registered financial system
• The mortgage must be fully insured
• The mortgage must be registered with the Land Department
• The details concerning registration will include the details to whom the mortgage is issued, the value of the property, repayment period, & terms

Dubai has a curious case with its mortgage proceedings as the country faced an increased demand for land in recent years is what the professional real estate lawyers says. The real estate prices saw great gains, as much as 79% from 2007. Even though the high prices will bring in more overseas capital, the Dubai government realized the need for a most structured set of rules and regulations to maintain order and smooth progression of the economy. Therefore, without waiting for things to worsen, the Dubai government has made the necessary changes to keep the system running at full steam.

The new Mortgage laws will enable the flow of REITs (Real estate investment trusts) and alternate finances, which will greatly help the developers to build property without struggling to find capital. Since Dubai now stands as a prime location for investment opportunity to foreigners, the new laws certainly give them better visibility when it comes to investing in Dubai. These new reforms fall under the vision “Dubai plan 2021”.

The new set of laws is also aimed at helping the middle-class residents to buy their own property, freeing them from rentals. With the current real estate scenario, a user will have to pay at least 32% of the total value of the property upfront. With the new laws, this value is expected to decline, helping the mid-tier section to own property in Dubai.

The new Mortgage laws are indeed a welcome change in Dubai, and it will help many to realize their dream of owning property in Dubai.