The outcomes of a new study on the Dubai real estate sector have tinted the main areas of concern for those purchasing property in Dubai as safety and faith, and construction delays. The research, conducted on behalf of Better Homes as part of client research that targeted over 2,000 people, found that over 50 per cent of buyers of property in Dubai were most concerned about security and trust issues. Construction delays, a common problem throughout Dubai came in as the second most common cause for concern with 19% of all responses.
Ryan Mahoney, Managing Director of Better Homes, the Gulf’s largest real estate agency, said that the results “were not all that surprising and given the high values involved with real estate transactions its right that people err on the side of caution.” He added: “When compared to some more established markets, the sector in Dubai is still relatively new and in any such markets there is always likely to be similar concerns.
However, the good news for investors in Dubai is that the market is becoming increasingly regulated. “Regulation in the industry here has come on leaps and bounds in recent months," Mahoney said. While there is still a long way to go, the establishment of the Real Estate Regulatory Authority (RERA) along with the implementation of laws such as Escrow have really helped tighten things up in the market, putting it on more of an equal level when compared with our more developed international counterparts.
Mahoney said he feels that the survey should serve as a reminder to all potential investors to beware. “I would advise anyone to always purchase from reputable developers and through reputable real estate agents to reduce any unnecessary risk,” adding that, “at Better Homes, we always carry out comprehensive due diligence before taking on board any project to ensure that the end product meets the required standards and expectations.
Rami Khairy Khalil Shaaban a client of Better Homes who recently purchased a villa in Dubai, supported these comments. “For me, choosing an established company reduced the potential risk and removed any unnecessary worries as I knew I was dealing with professionals," he said.
Mahoney also believes that rules such as the escrow law, where monies collected in payment for units is held in a trust account and released in phases linked to construction, will help to further alleviate concerns. “With escrow in place clients can feel safe in the knowledge that their investment is safeguarded," he said. Certainly, the escrow law should help speed construction along as payments will only be released based on construction progress.
Summarising Mahoney said: “Dubai is becoming a safer place to invest and while some delays are inevitable and often unavoidable, as competition increases, we are seeing more projects being completed on schedule.”
