New guidelines for property valuations in Dubai are planned for the middle of 2010 aimed at making the emirate’s real estate industry more professional, it has been announced.
Dubai’s real estate watchdog is looking to bring in new legislation to regulate how house valuations are conducted, following the slump in prices which saw well over $100 billion wiped off its property market assets.
The Real Estate Regulatory Authority is currently working with the Dubai Land Department and other interested parties to draft appropriate legal guidelines to regulate how valuations are conducted, the organisations head real estate appraisal Mohammed Khodr Al-Dah confirmed.
‘Having recognised the increasing importance of accurate evaluation of real estate assets, RERA is currently working on new guidelines,’ he said.
The announcement comes as a new report from international real estate consultants says that more professional valuation standards are needed not just in Dubai but throughout the Gulf region, the Middle East and North Africa.
The report from Jones Lang LaSalle praises Dubai for leading the way but says that change is ‘an essential precondition for rebuilding the trust and confidence required for the recovery of real estate markets across MENA’.
‘Accurate and regular valuations comprise an integral part of the sound investment and risk mitigation strategies that investors need to adopt as the real estate market faces continued uncertainties and only selected stability in 2010,’ the report added.
Jones Lang LaSalle said that while valuations were not the sole answer to reversing a trend of falling transaction volumes, they could ‘provide a catalyst for the improvement in certainty and transparency required for the markets to recover’.
The real estate industry is expected to account US$250 billion of the planned projects, or more than one third across all sectors in the region from 2010 to 2013, which collectively amounts to US$717 billion, according to latest market statistics.
The past several years have also witnessed the majority of GCC investments directed towards the real estate segment, while data on future planned projects sourced from MEED Projects show that the growth trend will continue in the coming years.
In addition to the real estate sector, the region is also witnessing productivity in other industries, with the construction of a considerable number of hospitals, roads, railways, and airports in full swing across the GCC.