As imexre.com already mentioned, Dubai off-plan developers are trying all thinkable methods to prove their offers reliability to potential real estate buyers demonstrating the highest transparency and providing a variety of benefits, among which there are guarantees, high enough to convince the project will be delivered in time. But a 100% guarantee for the off-plan project is still rather rare even at the global real estate market. However, now it is possible in Dubai.
“There are developers who have given 100 per cent construction guarantee and this is the ultimate guarantee,” said Marwan bin Ghalita, Real Estate Regulatory Agency (RERA) Chief Executive Officer, without giving names of the developers.
RERA disclosed its official data, according to which, Dubai real estate developers currently keep about AED 29 billion in escrow accounts, which gives confidence in the future of local off plan property projects.
Trying to cope with speculation and protect buyers Dubai government has adopted Law №8 of 2007, which requires all developers to deposit all the funds received from investors in the escrow account, from where RERA will later release this money for construction after proper assessment of the project required readiness is done.
Among the guarantees previously sought there were a mandatory requirement for the developer to buy 100% of land for development prior to construction, and deposit at least 20% of the project’s cost in RERA’s accounts, while another 10% of the project’s cost is paid by a general contractor.
“Developers want to complete their projects with many of them wanting to start selling only after the project nears completion. This shows that the industry has matured over the time,” Bin Ghalita believes.
In the first quarter 2016, 38 new projects were launched in Dubai, while The Dubai Land Department has reported AED 55 billion worth of property transactions conducted across all categories during the same period.