Dubai Land Department director general Sultan Butti Bin Mejren has confirmed that there will not be any hike in real estate fees.
“A number of market players are talking about alleged reports that Dubai Land Department will be increasing real estate registration fees from 4 per cent to 8 per cent,” said Bin Mejren.
“This is a baseless rumour and only serves to encourage the return of speculation. It confuses buyers and needlessly compels them to speed up their purchasing decisions.”
Under the current rules, the DLD, which regulates the emirate’s property market, charges 4 per cent of a property’s price as transaction fees – applicable to both buyers and sellers.
The rate was previously doubled (from 2 per cent) in 2013 when a property boom in the emirate raised concerns of a market crash.
Bin Mejren added that there is no requirement to revisit the fees for various activities and services in the near future as the market had stabilised.
Measures including the hike in property transaction fees and limiting mortgage loans to buyers were some of the steps introduced to curb flipping, a practice partly blamed for the crash in Dubai’s property market in 2009.
Although policy experts lauded the DLD’s efforts, they urged stronger measures against speculation.
The DLD too had briefly toyed with introducing addition regulation to govern off-plan sales after property prices shot up more than 30 per cent in 2013. However, the real estate regulator said the measure would only be taken after reviewing the growth of transactions.
Subsequently property values grew steadily in 2014, with the rate of growth slowing considerably.
According to data released by the DLD, property deal values in Dubai fell by 7.6 per cent in 2014 to reach Dhs 218bn. Growth in house prices also slowed with a continued market correction expected this year.
A recent S&P report forecast a moderate 10 to 20 per cent drop in real estate prices this year. The firm highlighted additional supply and lesser demand in the market, volatility in the UAE equity markets and lower oil prices as key factors.