Dubai should revert to publishing quarterly updates in its rental calculator and introduce a citywide performance index to boost transparency in real estate markets, according to JLL’s Mena head of research, Craig Plumb.
The property consultancy has just produced its biennial Global Real Estate Transparency Index, in which Dubai has climbed one place up its global ranking table to 48th out of 109 markets, placing it in a category described as “semi-transparent”. It remains the most transparent market in the Middle East, but lags global competitors such as Hong Kong (15th), Singapore (11th), the United States (4th) and the UK (1st).
Mr Plumb said that Dubai had announced a number of measures to boost transparency since the last index was published in 2014, including the passing of an open data law allowing for more government data to be shared, added more detail to its rental index calculator and announced a new system for ranking brokers.
However, he said that some of these initiatives “are not fully implemented” yet, and that some measures – including the Dubai Land Department’s decision to only update its rental index calculator annually, as opposed to previous quarterly updates – had hampered transparency.
“There are still weaknesses with the Land Department data,” said Mr Plumb.
“Dubai is better than other countries in the region, but in terms of the overall rankings it is still very much in the middle,” said Mr Plumb.
He argued that an overall index of real estate performance should be the first move that Dubai makes to boot transparency, pointing out that 43 of the 50 highest-ranked markets offered one of these. This “should include an element for capital growth as well as rental performance” to give investors a better idea of the total returns available, he said.
Elsewhere in the region, Abu Dhabi dropped six places to 59th, but Saudi Arabia jumped by four places to 63rd and Egypt by five places to 67th. They were also in the semi-transparent category, alongside Bahrain (68th). Kuwait (73rd) and Qatar (74th) were placed in the “low transparency” category, while Oman (89th) was described as “opaque”.
Writing in the Index report, the director general of the Dubai Land Department, Sultan Butti Bin Mejren, said that Dubai had made improvements in 15 of the 28 areas that make up the index.
He said the Dubai government had “recognised the importance of improving transparency” to attract inward investment in its property market.
However, he also acknowledged that there was room for further improvements, and said the DLD “is actively looking to create” a real estate performance index, possibly in association with a specialist provider.
Mr Plumb said that transparency in property markets was vital to attracting investors, with the most open markets being the ones attracting the greatest weight of capital.
He also highlighted the need for greater transparency in real estate markets, particularly following the leak of the Panama papers from the offshore law firm Mossack Fonseca earlier this year.
“In the past, real estate has been used as a means of avoiding some capital and money laundering controls, and I think the Panama papers has brought that into the public eye.”
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