According to experts and officials, the new Dubai decree on the mortgaging of granted land could work as a catalyst for development, reported The National on Wednesday.
Previously granting mortgages on granted land was considered a risky business for banks, said Mohamad Khodr Al Dah, Director at the technical department of the Dubai Land Department. He added that the new law „has really cleaned up“ since it specifies a clear legal framework for mortgaging.
Another voice comes from Ismail Al Hammadi, Managing Director of Al Ruwad Real Estate, who says that the decree would help greatly with providing capital for the accelerated development of land as well as protecting investor rights.
A less euphoric judgment though is that by Jesse Downs, Managing Director at Phidar Advisory, who says “Banks rarely accept land as sole collateral because land is particularly illiquid in periods of slow growth or decline,” adding that the importance of land as collateral will not be too high as long as the market remains volatile.