More than 50% of construction projects worldwide are completed over budget or behind schedule, and 61% of projects in the US face serious implementation problems. Only 31% of projects stay within the initial budget (with a margin of error of up to 10%). In countries without strict government control, the figures are even worse. However, there are jurisdictions where the authorities have created effective systems to protect real estate buyers from unscrupulous developers.
Dubai. The UAE has one of the strictest control systems in the world. The Real Estate Regulatory Authority (RERA) requires that all buyer payments be made to separate bank accounts for each project. The developer can only withdraw funds in stages, after receiving regulatory approvals based on actual construction progress. The result is impressive: 98.3% of all off-plan projects in Dubai are completed successfully. Of the remaining 1.7%, most are transferred to other developers, and less than 0.1% of projects result in a full refund to investors. If a developer encounters financial difficulties, RERA immediately freezes the escrow account and seeks a solution: transfer of the project to another developer, full refund to buyers, or restructuring of the project with the consent of the majority of buyers.
Singapore. The Building and Construction Authority of Singapore (BCA) was established in 1999 and oversees every stage of construction. All building plans undergo mandatory review by qualified specialists before work begins. During construction, regular inspections are conducted to ensure compliance with approved plans and building codes. The BCA requires developers to provide detailed construction schedules and financial guarantees. If a contractor does not meet the standards, their license is suspended or revoked. The system also includes mandatory testing of materials and structures in accredited laboratories. Thanks to such control, Singapore has become the leader in the Asia-Pacific region in terms of the quality of green construction, ahead of Tokyo, Sydney, and Seoul.
Canada. The Tarion Corporation operates in the province of Ontario, providing protection to buyers of new homes for over 40 years. The system covers more than 365,000 homes and accepts about 50,000 new projects annually. All developers undergo mandatory licensing with financial status checks. Tarion provides comprehensive protection: deposit protection until completion of construction, compensation for delays, and warranties for up to seven years after completion. The maximum coverage is CAD 400,000 for private homes and CAD 300,000 for condominiums. If a builder goes bankrupt, Tarion completes the project or refunds buyers from a CAD 495 million guarantee fund.
Strict government control systems radically change the investment attractiveness of real estate markets. In jurisdictions with effective regulation, foreign investors get predictable rules of the game and real capital protection. This explains why real estate overseas is in high demand among international buyers.
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