Real estate regulator to tighten grip in Dubai

photo credit: trippinlarry

Dubai’s real estate enforcement group is looking to tighten its grip on investment property developers in an effort to stabilise the market.

UAE paper The National reports the Real Estate Regulatory Authority (Rera) and the Dubai land department will introduce new regulations to stop the local economy “overheating”.

Investment property developers could be forced to tie payment plans to the completion of homes under the proposals.

Companies could even be asked to complete 20 per cent of the homes in a development before sales start, The National adds.

Quoted by the paper, Lisa Dale, head of the real estate department at the law firm Al Tamimi, said the move could result in “stronger” investment property developers.

Some developers have begun to put high-profile projects on hold, leaving a question mark hanging over those who had already purchased or who were looking to buy homes in a development.

Commentators have warned confidence in investment property in the emirate could take a hit if some schemes do not re-start within a few months.

Most Dubai deals have previously involved no connection between payment dates and completion of homes in a scheme.

The National added real estate developers would be allowed to charge 30 per cent of the sales price of homes upfront.

The other 70 per cent would come due in instalments connected to construction stages, in a move also designed to deter rogue investment property firms.

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