However an essential move towards rebuilding the market is clearly in place, however in order for it to bounce back in full force, industry participants will have to comprehend the basic changes in the market.
Industry analysts have indicated that the Emirates property industry does not involve convincing wealthy businessmen from all over the globe to buy property with the main objective of reselling them or to generate rental yields. Now more than ever will require people living and working in the UAE to spur the market.
Craig Plumb the head of research for Jones Lang LaSalle said, "Fundamentally we are moving from an investor's market to an end user's market,"
According to Economists the UAE property markets supply and demand equivalence will be out of sync for the next couple of years.
Just looking into the past three years, the home prices in Dubai have dropped 50 to 60 per cent, and yet there are another 10,000 homes scheduled for completion 2012, though over 40 per cent of office space in Dubai is vacant.
Abu Dhabi, have scheduled 50,000 homes to be completed by 2013, which represents a 27 per cent increase from the present supply.
The demand side of the property market will need to be increased in order to strengthen the market. For most of the property executives the visa policy initiative that was broadcasted by the government in June 2011, will prove to be just this incentive to reach buyers. The policy offers an extension on the visas of buyers to 3 years.
"That policy is important," says Gurjit Singh, the chief operating officer for Sorouh, the Abu Dhabi developer. "Now what needs to be fleshed out are the rules that go with it."
An approach to enhancing the market is by entering the global competition arena to appeal to retirees, as numerous countries in Central America and also Asia have already implemented policies, which simplifies activities such as buying property, transferring of funds and settling in their countries.
"This is not uncommon," says Mr Singh. "They allow people to stay for a substantial period of time."
Making financing more available to potential buyers is a key recovery factor. In addition by focusing on more than just low interest rates and adding seriously needed liquidity in the market, lenders will be able to recoup their investment if a buyer defaults. Implying a speedy process to foreclose, reliable valuations and an active resale market, without a conceivable foreclosure market, lenders had until recently felt the housing sector too risky for their shareholders.
Developers have been vigorously lobbying for the Central Bank to apply these factors, as buyers are turning away due to interest rates that are over 6 to 7 per cent and loan-to-value ratios that are far above international levels.
"We need to see greater availability of financing," says Ian Albert, a regional director for Colliers International.
The Land Department auctioned eight repossessed homes in Dubai during the month of November 2011, this is just the initial sign that the system was working.
The mortgage market also needs a couple of adjustments that will raise the appeal for international buyers, as foreign investors continue to be stunned by the possibility that if a cheque bounces and they default on their mortgage they can go to jail.
The shift at the beginning of 2011finally allowed companies outside of the Dubai International Financial Centre to be able to settle disputes in the DIFC courts, which use international law standards. This shows that the continued advances in the legal system are definitely playing a role.
"It's good for Dubai," Richard Briggs, the executive partner at Hadef & Partners, told The National when the change was announced. "It will change the nature of litigation in Dubai as more claims work their way through the DIFC."
Developers will also need to be ready to counter the negative publicity that exists in the international industry related to the UAE property market.
The quality and management of projects will increasingly become as important as price and location. "Developers need to step up to the plate and deliver good products that are well managed," says Mr Singh.
But on a basic level the above approaches will not change anything if the economy does not achieve growth, thus initiatives that will increase the logistics, trade, shipping and aviation industries have a direct influence on the property market.
"One of the things we've learned is that we are not decoupled from the global environment," says Mr Plumb
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