WadiOnline News - Ajman Takes On Property Slump

Ajman takes on property slump

Publish Date: 2009-11-04 20:00:27 Story Code: 22233

The property regulator in Ajman is preparing lease-to-own rules aimed at boosting investor demand after hundreds of residential projects in the emirate were stalled.

The Ajman Real Estate Regulatory Agency (ARRA) also called for a series of measures aimed at reinvigorating the depressed property market and ending a stalemate between developers and off-plan buyers who are reluctant to make additional payments on projects they fear may not be built.

�This will give an incentive for all developers to complete their projects,� said Omar al Barguthi, the director general of ARRA.

Ajman had approved about 160 projects, or less than a quarter of the total planned in the emirate. Construction has not yet started on most of the 15 suburban developments launched over the past three years along Emirates Road.

Mr al Barguthi said a lease-to-own policy was an incentive for developers as well as investors and tenants.

�As a tenant you know that instead of just paying your lease you would be taking ownership as you go,� he said.

�This will protect investors� interests because they know that they don�t have to sell a property to make money.

�They will have a chance to lease to own it and recover their cost.�

Developers in other emirates have also launched lease-to-own incentives, including Emaar Properties, the developer based in Dubai.

ARRA plans to restrict the practice to certain areas and hopes it will help steady prices.

The regulator would also like to see an overhaul of visa regulations to encourage more investment from overseas buyers.

�We have made recommendations in a document that has been submitted to the concerned authorities,� Mr al Barguthi said.

Some developers in Ajman sold properties with the promise of a residency visa, but have since backtracked because the required legislation was not introduced. A new federal law was introduced last June entitling foreign owners of property units worth at least Dh1 million (US$272,260) to a six-month, multiple-entry visa for the UAE.

The regulator wants that to be extended to three years if the buyer still owns the property.

© The National 2009. All rights reserved.

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Source: The National
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