Off-Plan Investments in Dubai – Safer Than You Think!

Dubai has introduced some of the world’s most stringent regulations on property development (known as “off-plan” investments). What’s the goal? Investor protection and full financial transparency throughout the development process.

Each project is overseen by the government agency RERA (Real Estate Regulatory Agency), and the developer is required to open a dedicated escrow account to which all proceeds from property sales are transferred. Additionally, a developer can only begin selling units after one of the following conditions is met:
• Payment of 20% of the project’s value by the developer,
• Submission of a bank guarantee, or
• Completion of 20% of construction.

Importantly, the investors’ funds deposited in the escrow account are released only after the completion of specific construction stages.

If any issues arise, the funds in escrow can be used to complete the project with another developer or refunded to investors. In practice, projects are almost always continued — every plot of land in Dubai is highly desirable for developers.

What’s more, the final 10% of escrow funds is paid out only 12 months after construction is completed, which incentivizes developers to promptly address any defects.

Thanks to this system, investing in real estate in Dubai has become one of the safest ways to allocate capital.

Have questions? Contact Rafał Małolepszy: r.malolepszy@siw.pl