DUBAI OFF-PLAN

Posted On Monday, 24th April 2017

Confidence has never been stronger in the Off Plan market.

The Real Estate Regulatory Agency Chief Executive Officer, Marwan bin Ghalita, told Emirates 24|7 that Dubai's Developers give the ultimate guarantee of completion.
Some developers in Dubai are giving 100 per cent construction guarantee, which is the "ultimate guarantee" that any developer can give, Real Estate Regulatory Agency Chief Executive Officer told Emirates 24|7.

He revealed that Dh29 billion are being held escrow accounts which reflectsconfidence of developers and investors’ in the market.

It is compulsory for every developer in Dubai to open an escrow account under Law No. (8) of 2007 concerning escrow accounts for real estate development. All the payment received from investors has to be deposited in it. Money is released by RERA after it assesses the project’s construction having met the required percentage.

RERA Chief said they were no longer afraid of projects being stalled, as developers were launching projects to build them than mere selling them.

“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.”

Among the guarantees sought is 100% of the land cost to be paid by the developer, a minimum of 20% of the construction cost to be deposited with Rera with contractors having to pay another 10% of the construction cost.

Ghalita said investors had become very smart and were asking questions on materials used, sustainability, finishes and service charges, which was not previously the case.
Facts and Figures 

If you look at the figures for off plan from October 2016 - today, you can see that off plan is really popular in the Dubai Market. 

Investors and end users can see that Dubai is a mature market and in the coming few years, with the Ruler's future plans for the Emirate, the market will continue to stablise and grow.

October 2016 - April 2017

12,179 Oqood Registered Properties 

(Oqood is pre-registrations and applied for at the time of purchase of an off plan property)

In the same period, there were 8,652 transferred sales on the secondary market (resale).

This means there were 33% more transactions in off plan than in ready properties. 

We saw a huge difference in the previous year, from October 2015 till April 2016 the figures were the other way around.

6,653 off plan sales against 9,262 resales transactions.

This is a 32% difference with the secondary (resale) market being more popular.

As you can see from the above, confidence is really growing in the future of Dubai Property Market.  

If you are interested in finding out more about the off plan market please reply to this email.


Data from propertymonitor.ae