The frequency with which Dubai’s developers are now offering post-handover payment schemes to buyers in off-plan sales should be a cause of concern, according to Marwan Bin Galita, CEO of Rera (Real Estate Regulatory Agency). It could pose a problem for the overall market if there is a sudden spike in buyers failing to meet these commitments to developers. “Developers are allowing 50% or 60% of the payments from investors to come in after completion,” Bin Galita said. He added that “developers are free to go for any marketing scheme that will help them sell… it’s not Rera’s responsibility to oversee these. But the developers better ensure that investors’ dues are received.” The practice of “back-loading” instalments two or three years after the completion has really taken hold with recent off-plan launches. Bin Galita said that 38 projects were launched in Dubai in 1Q2016, while 46 projects were completed last year. He further stated that Rera requires extra guarantees from developers and contractors to ensure the completion of their projects. The contractors’ financial stability and delivery record on previous projects are assessed and developers need to commit 10% as financial guarantee. In addition to other requirements such as the full payment of the land and a construction guarantee amounting to 20% of the total value. Bin Galita said that some developers have provided more than 40% as financial guarantees. On Sunday, the Dubai Land Department announced that there were AED55 billion worth of transactions across all categories in 1Q2016, down from AED64 billion in 1Q2015, but well within expectations given the soft selling environment in recent quarters. (Gulf News)