Developers operating in the Egyptian market are calling for a comprehensive real estate regulatory framework combining the UAE’s project oversight and escrow accounts, Saudi Arabia’s pre-licensing requirements for off-plan sales, and the UK’s emphasis on transparency and consumer protection.
The call comes amid renewed government efforts to tighten oversight of the real estate market following recent directives from President Abdel Fattah Al-Sisi to regulate the sector and take firm action against developers that fail to deliver projects on schedule.
With developers selling units before construction is completed and offering instalment plans extending over several years, the sector increasingly depends on regulators’ ability to ensure timely delivery, protect buyers’ savings and maintain confidence in the market.
As investment volumes grow and residential developments become increasingly complex, industry experts argue that effective regulation must extend beyond sales and licensing to cover project execution, financial oversight, disclosure requirements and dispute-resolution mechanisms.
International experience offers several approaches to addressing these challenges, although experts caution that Egypt should develop a framework suited to its own market rather than replicate another country’s system wholesale.
UAE model: Centralised oversight and escrow accounts
Alaa Fekry, chairperson of Beta Egypt and vice chairperson of the Real Estate Development Committee at the Egyptian Businessmen’s Association, said Dubai offers one of the region’s most established models for real estate regulation.
The UAE model combines project registration and licensing, developer oversight, regulation of off-plan sales and safeguards for buyers’ funds, with the Dubai Land Department and other relevant authorities playing key supervisory roles.
Escrow accounts are among the system’s main pillars. Developers selling properties off-plan are required to establish separate escrow accounts for individual projects, with withdrawals subject to regulatory controls designed to ensure that buyers’ payments are directed towards the developments for which they were collected.
This approach helps reduce the risk of developers diverting funds from one project to finance another, while strengthening the link between customer payments and construction progress.
The model also relies on digital services and greater access to information, allowing buyers to verify project licensing, check development status and obtain relevant details before committing their money.
Fekry said Egypt could benefit from adopting similar safeguards, particularly as off-plan sales remain an important source of financing for residential developments.
However, implementing such measures would require clear rules governing the release of funds, effective monitoring and sufficient institutional capacity to supervise projects throughout their development.
Saudi Arabia: Licensing before off-plan sales
Saudi Arabia offers another approach through the General Real Estate Authority and the Wafi programme, which regulates off-plan sales and leasing.
Under this framework, developers and projects must meet regulatory requirements before properties can be marketed for off-plan sale. The system also incorporates project-specific escrow accounts and controls on the use of buyers’ payments.
This means that off-plan sales are treated as a regulated activity requiring prior approval, rather than simply a marketing and contractual process between developers and customers.
The framework also provides mechanisms for addressing troubled projects, offering a more structured approach to managing delays and protecting buyers when developments encounter difficulties.
Fekry said the Saudi experience provides useful lessons for Egypt, particularly in strengthening pre-sale requirements and ensuring that developers demonstrate their readiness to execute projects before collecting payments from customers.
For Egypt, such an approach could help address concerns over projects being marketed before developers have met essential requirements relating to land ownership, permits, designs and implementation capacity.
UK model: Transparency and accountability
While the UAE and Saudi models place considerable emphasis on project oversight and financial safeguards, the UK experience offers lessons in transparency, consumer rights and accountability after a sale.
Tarek Eid, board member of the Arab Kuwaiti Group and executive director of its real estate arm, Beit Al-Istithmar Al-Arabi, said the British approach places importance on clear standards governing property sales, contractual obligations, delivery and after-sales services.
The system also provides channels for buyers to raise complaints with specialised bodies over issues such as construction quality and developer performance, alongside continuing developer responsibilities for after-sales services.
Eid said these principles are relevant to Egypt, where buyers need reliable information about project specifications, delivery schedules and contractual commitments.
Greater transparency could also help reduce disputes arising from discrepancies between advertised properties and delivered units, as well as delays and unclear contractual terms.
What regulatory model is best suited to Egypt?
Fekry argued that Egypt should develop a hybrid regulatory model combining key elements of the UAE and Saudi experiences while incorporating international best practices in transparency and consumer protection.
The proposed framework would centre on a strong, independent regulatory authority responsible for licensing, inspections, developer supervision and monitoring project implementation.
It would also introduce escrow accounts gradually, particularly for off-plan developments, with withdrawals linked to actual construction progress.
Such an approach would seek to ensure that customer payments are used for their intended purpose while allowing developers to access funds in line with clearly defined implementation milestones.
Gradual implementation to avoid disrupting investment
Industry executives warned that regulatory reform should be introduced gradually to avoid placing excessive burdens on developers or disrupting investment and construction activity.
Fekry recommended beginning with large developments and off-plan projects while granting companies a transition period to comply with the new requirements.
A phased approach could allow regulators to test oversight mechanisms, strengthen enforcement capacity and address implementation challenges before extending the framework across the wider market.
Eid said reform should begin with mandatory project licensing before sales, supported by a comprehensive file covering land ownership, permits, project costs, financing arrangements, construction schedules and the developer’s capacity to complete the development.
He also called for an early-warning system and a digital platform to monitor construction progress, financial liquidity and expected delivery dates, while classifying projects according to their risk levels.
Such tools could help authorities identify potential delays and financial difficulties before they develop into major problems for buyers.
Regulation should also extend to advertising and brokerage activities, including measures to prevent the promotion of unlicensed projects and misleading property advertisements.
Eid proposed establishing a specialised body to protect real estate consumers and respond quickly to complaints involving delayed delivery, discrepancies in property specifications and misleading marketing.
He also stressed that regulators should have mechanisms to rescue distressed projects before resorting to punitive measures, where feasible. These could include restructuring, replacing contractors or management teams, or transferring projects to qualified developers capable of completing construction.
Balancing buyer protection with market stability
Egypt’s regulatory challenge is to strengthen buyer protection without undermining the financing mechanisms on which much of the property development sector relies.
Off-plan sales and instalment-based payment plans help developers finance construction and enable buyers to spread payments over several years. However, without effective oversight, these arrangements can expose customers to delays, incomplete projects and uncertainty over how their payments are used.
A stronger framework would therefore need to balance financial safeguards with practical financing requirements while ensuring consistent enforcement across developers and projects.
The experiences of the UAE, Saudi Arabia and the UK suggest that no single measure can address every risk. Licensing, escrow accounts, transparent disclosure, construction monitoring and accessible dispute-resolution mechanisms are most effective when they operate as parts of an integrated system.
For Egypt, the priority is to establish a regulatory structure that combines preventive oversight with effective enforcement and clear accountability, while introducing changes at a pace that allows the market to adapt.