How to Avoid Risks when Investing in Real Estate under Construction in the UAE

Investing in Real Estate under Construction

The first fear that a real estate investor may have is that construction will stop and they will have to wait for years to get an apartment. But there are very few such cases in Dubai since the activities of constructions companies in the UAE are strictly regulated at the state level.

Read this material and learn more about how this process happens.

How does the UAE State Protect Depositors’ Money

All residential and commercial property projects are necessarily registered by a special agency (Dubai Land Department), and any operations are carried out under its control. Besides, investors’ money does not go directly to the developer, but to the escrow account. The developer gets access to them only after reaching a certain stage of construction, and all subsequent expenses of the developer are also controlled by the state agency. Even if an exceptional unforeseen situation arises and the project is frozen, the state will quickly find another developer to complete. Otherwise, the money from the escrow account will be returned to depositors.

Installments as a Guarantee

Installments, that is, a payment plan, is also considered a kind of guarantee for investors, since, at the initial stages of development, the buyer pays only a small percentage of the total cost and pays the principal amount only after the house is delivered.

How to Protect yourself from Risks

Thus, objective risks when investing in off-plan real estate can be reduced to two possible options: delayed completion of construction or fluctuations in prices on the market.

To get an apartment on time, the main thing that is required of you is to choose a reliable developer with an impeccable reputation. All information about construction companies is publicly available, including in a special DUBAI REST smartphone application published by the Dubai Land Department. Even if the project is implemented with a delay, you will still be able to receive compensation for damage. The developer can offer you additional services (service, maintenance) for free or reimburse you with money.

Real Estate House Insurance

With regard to price changes in the real estate market, it is worth saying the following. This is the most unpredictable process, which even professional analysts often cannot predict. The market situation always depends on economic trends in the world and in the region. Even if the price of your property decreases even before the completion of construction, there is no reason to panic: after the transfer of the house, losses can be compensated by renting an apartment. In order to resell real estate profitably, you just need to wait for the market situation to level out.

Guaranteed Completion of Projects Under Construction in Dubai

The Dubai Land Department has created a special regulatory body for real estate transactions – RERA (Real Estate Regulatory Agency), which sets a number of requirements for developers. Every developer is obliged to comply with it in order to get a construction permit, and even more so to put projects under construction for sale.

Among the obligatory requirements for the developer is the ownership of 100% of the land on which the building will be built, as well as a guarantee fee of 10% of the cost of the entire project. Before the sale, the developer must perform at least 20% of the construction work and issue a bank guarantee to one of Dubai’s financial institutions.

Our Assistance in Buying Real Estate in the UAE

Finding a reliable property in Dubai under construction is easy! Find out as much detail as possible about all new projects, ask for advice on prices and get the best personal offer. There are details on the official website: https://emirates.estate/.


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