The 3Cs of the Real Estate market Essential prerequisites – Capital, Confidence and Clarity

By Mohanad Alwadiya
Special to Properties

There are three essential ingredients considered prerequisites for any real estate market to function effectively. These can be summed up as Capital, Confidence and Clarity.

The 3Cs are interdependent whereby a shift or change in any one element will affect the other two. The relationship can either be positive or negative, and can lead to a multiplier effect on growth, or can increase the rate of contraction or decline. The good news is that all three present in Dubai.

The amount of capital being injected has been steadily increasing midway through 2011. This capital comes from a number of sources. Creditors such as banks have been more willing to lend cash as the world and local economies attained a semblance of growth.

Confidence in any investment venture boils down the perceived predictability of future cash flow and capital growth. With much of Dubai property having reached a cyclical low and some returning increased cash flow and capital growth, confidence is on the rise again.

The last ingredient, clarity, is arguably the most important. Investor confidence in the level of understanding of their legal rights, the consistency in the application of the law, government economic and social policies, and knowledge of developer track records in terms of quality, integrity and proficiency can be boosted by a proactive drive for clarity.

Law makers in Dubai have been working hard to address the issues of clarity and confidence. Steps have been taken to introduce laws that better protect investor rights, and standardize and clarify the relationship between developers and investors.

Increased clarity is essential to driving, confidence and eventually creditors and investors capital into Dubai’s real estate landscape.
The writer is the Managing Director of Harbor Real Estate
Handy Hints
• The amount of capital being injected is steadily increasing.
• Lawmakers are addressing issues of clarity and confidence.
• Steps have been taken to better protect investors rights

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