New rules in the real estate construction

0
682

Dubai Land Department tightened the rules for off-plan real estate – objects under construction.

To buy apartments in Dubai, many make deals at the early stages of construction. For developers of the emirate, this is one of the main ways to obtain investment. Previously, before the start of sales, the developer was required to confirm ownership of the project and pay all costs associated with the land. Now, in addition, companies are also required to pledge 20% of the cost of a new project to an escrow account and obtain permits from the relevant authorities.

This decision was made in response to a sharp increase in the level of sales of unfinished real estate, which was manifested in 2017 and continues to this day.

On the one hand, the new rules will hit small and medium-sized businesses in the construction sector. But, on the other hand, these measures will ensure that builders fulfill their obligations within the agreed period.

The new law will also protect the interests of those who make their first investments in real estate, which means that they can not afford themselves to lose capital and are afraid to take risks in it.

Finally, the changes in the legislation will make developers more accurately calculate the cost of future projects.

In addition, the sale of real estate in Dubai will also change: recently developers offered generous payment schedules that allowed paying for four or even more years, but soon such a practice will obviously stop. Probably, because of the higher costs at the initial stages, developers are now limited to schedules designed for two or three years.

Thus, buying an apartment in Dubai or investment property will be more difficult, but the risks will also decline. Many analysts at the end of 2017 expressed concern about the high demand for off-plan projects and the danger of unbalancing supply and demand. The introduction of new rules will stabilize this segment of the market.

On the contrary, Dubai has simplified the procedure for the construction of industrial buildings.

The Dubai Municipality has launched a new contractor registration system, which goal is to speed up the construction of industrial buildings in the emirate.

This will give opportunity for the contractor to design industrial buildings and monitor their construction without having to appoint a consulting office.

This will positively affect the rapid completion of projects and their cost and will open the doors for investment.