Fees to double from 2 per cent to 4 per cent in bid to curb speculation
The Dubai Land Department plans to double the property registration fee charged for real estate transactions to 4 per cent from 2 per cent.
The move will have a positive impact on the market as it will limit the flipping of property, according to Sultan Butti Bin Mejren, director general of the governments Land Department. The new fee structure will start to be implemented from 6 October, 2013.
The UKs Standard Chartered said in a recent report that the rebound in Dubais housing market is being driven by much-improved fundamentals rather than the flipping of off-plan properties that fuelled the 2008 boom, as the government is deploying efforts to ensure that off-plan sales are controlled.
While noting that there is a risk that the market could see a rise in speculation, the bank concluded that there are no serious indications of a speculative bubble in the housing market.
However, a recent report by the Dubai office of US property consultancy CBRE cautioned that rents were rising faster than wages in the emirate, which could eventually make residents and companies reluctant to come to the UAE.
The residential sector is showing increasing signs of overheating with lease rates rising far too quickly to be justified by the current economic environment, as rental growth significantly outpaces growth in wage levels, said Matthew Green, head of research for CBREs Dubai office.
The result is the rising cost of living, which could start to impact on Dubais competitiveness if sustained at current levels for too long.
The Washington-headquartered IMF also recently weighed in on Dubais property market, warning that the government might need to step in to prevent another boom-and-bust cycle.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.