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FNC considers property watchdog

Mahmoud Habboush The National
FNC considers property watchdog - Real Estate - Property - UAE - FNC

A federal property sector watchdog that co-ordinates the work of local regulatory bodies could be introduced UAE-wide under plans being considered by the Government, the Minister of State for Financial Affairs said yesterday.

The scheme was one of several topics discussed at the session of the Federal National Council (FNC). Legislation to grant Emirati women married to non-UAE nationals access to housing assistance was passed, while the Government’s reaction to companies that produced medication containing harmful bacteria was discussed.

The session was dominated by plans to better regulate the UAE property sector, which has this year experienced job losses, the cancellation of numerous projects and a substantial decline in house prices.

The Government does not have a federal body with powers to monitor the sector. Instead, local governments, including those of Dubai and Sharjah, have established their own regulators, such as Dubai’s Real Estate Regulatory Agency. Ajman and Abu Dhabi are considering similar schemes.

“We’re looking into the possibility of carrying out a federal role to regulate this monitoring and co-ordinate among the [local] institutions,” said Obaid Humaid al Tayer, the Minister of State for Financial Affairs.

Mr al Tayer was answering a question by Amer Abdul Jaleel al Faheem, a member of the FNC, about the Government's efforts to control local banks’ “overfunding” of property projects owned by foreign investors.

Mr al Faheem said several foreign property developers have fled the country with their real estate projects unfinished.

“A number of developers have started their business here without having any capital,” he said. “They formed alliances to develop a number of real estate projects and then secured 100 per cent funding. After the [financial] crisis a number of them left the market and left their projects unfinished.”

A Central Bank resolution limits the lending for real estate projects to 20 per cent of the deposits that a bank has available for loans. Mr al Faheem claimed some banks did not abide by these rules.


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