Expats have the all-clear to buy freehold homes in some neighbourhoods of Abu Dhabi.
Overseas property buyers had been limited to purchasing leasehold homes.
The new rules bring home ownership laws in Abu Dhabi, the capital of the United Arab Emirates, into line with those in Dubai.
The Dubai government relaxed the rules in 2002, which sparked a property bubble as thousands of new villas and apartments were built off-plan and sold to investors.
The bubble burst with the advent of the global credit crisis in 2007 and many developments remained unbuilt and prices plunged.
Now, the market is picking up again, although prices are still below their peak.
The state-owned firm Aldar Properties will build homes in specially designated investment neighbourhoods which are the only areas where foreign purchasers will be allowed to buy.
Abubaker Seddiq al Khoori, the firm’s chairman, said: “Attracting overseas buyers to invest in Abu Dhabi property will bring long-term advantages to all the United Arab Emirates and opens up our construction market to a new source of capital.”
Dubai property market booming
In Dubai, the property market is expected to boom in 2014 after the number of home sales and the value of properties sold surged by 50% in the past year, according to government figures.
The number of sales was up 52% to 63,650, said the Dubai Land Department.
The value of the property sold was also up 53% to almost £40 billion.
“The figures reflect the confidence buyers and investors have in the Dubai property sector,” said a Dubai Land Department spokesman.
“Much of this confidence comes from the government tightening up procedures to improve trust in developers and agents and generally the way the market works in support of buyers.”
The changes included caps on borrowing for residents and expats aimed at tackling investors buying off-plan, which was widely blamed for undermining the market breakdown five years ago.
Property prices collapsed by up to 50% following the credit crisis and are still at least 20% below their maximum, according to local agents.
“We are anticipating homes to rise in value again this year, boosted by Dubai’s winning bid to host World Expo 2020,” said the spokesman.
World Islands development starts
Property developer Kleindienst has started work on one of the first resort projects on the World Islands, a man-made group of around 200 islands depicting a map of the world about three miles offshore from Dubai.
The firm is building hotels and villas on six islands known as the ‘Heart of Europe’.
The islands were finished in 2008, but no development has taken place since their completion.
