DUBAI-The government of Dubai this week implemented a long-awaited property law allowing foreigners to own property in three areas–Jumeirah, Jbel Ali, and Dubailand–being developed the state-owned real estate groups Emaar, Nakheel and Dubai Properties. The Dubai government announced its intention to make the change in 2002. Since guarantees were given in advance of the law’s implementation investors like the Trump Organization have already entered the market and cut deals. As a result, the effect of its ultimate implementation is expected to have only a minimal impact on the commercial real estate market.

Prior to the law being enacted, non-nationals with ownership stake in Jumeirah, Jbel Ali, and Dubailand areas had no autonomy over their investment. Sale contracts, however, stipulated that freehold titles would be granted as soon as the law was put into practice. The new law–Law No. 7–means foreigners now will be given the deeds to their land and may register ownership with the Dubai Lands and Properties Department. They may also transfer property ownership directly without having to go through the developer.

The law is expected to have a larger impact on the Dubai residential market, wherein prices have remained below those in comparable cities because of concerns about improper titles. As word about the enactment of the law spreads, increased interest by foreigners is expected to push values and also bolster the mortgage sector by attracting more lenders who will now feel more secure about providing acquisition loans. About 13,000 expatriate families moved into their new homes in advance of the law’s enactment, according to published reports; another 7,000 are expected to move in by the end of the year.

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