Forging Ahead: Finding Ways Through Dubai's "Off Plan" Real Estate Impasse

The cooperation of developers and purchasers is likely to continue to play a central role in procuring the completion of off plan projects, protecting investments and, ultimately, restoring confidence to Dubai's real estate market.

The challenges facing Dubai's off plan real estate market are significant for developers and purchasers alike.

With a significant downturn in property prices and a tightening of lending conditions, developers are now facing substantial reductions in cash flows resulting from purchaser payment defaults. In many cases, payment defaults are at a level where resulting cash flow is insufficient to meet project costs. Escrow balances have been diminished by land payments and other withdrawals, and developers are rarely able to procure new finance in the current climate.