Dubai Land Department chief defends 4% transfer fees

The total amount of real estate transactions in Dubai has crossed Dh101 billion since the beginning of 2014, according to Dubai Land Department (DLD).

“Nearly 26,645 transactions worth a total of Dh101 billion in the Dubai real estate market since the beginning of 2014. The marked attracted a total of 16,743 investors,” DLD Director-General Sultan Butti Bin Mejren said.

The total value of real estate transactions rose by 53 per cent to Dh236 billion in 2013 compared to Dh154 billion in 2012.   The total number of transactions in 2013 reached 63,652 compared to 41,767, an increase of 52 per cent.

UAE nationals were the top investors last year followed by Indians, Britons and Pakistanis.

Talking about the 4 per cent transfer fee, Bin Mejren said that the fee was “still less than many fees imposed by 110 countries worldwide.”

In Britain, the fees range from 4 to 15 per cent, Malaysia between 5 and 10 per cent, France 6 per cent, Japan 5.8 per cent, India 7.3 per cent, Pakistan 7.8 per cent and the countries of the Middle East and North Africa 6.9 per cent.

The fees were increased in October last year with the aim to stop flipping in the market.

“Dubai has become a global player and therefore fees for providing services have to be on a par with the city’s growth and development,” he added.

He pointed out the government’s efforts in continuously developing the infrastructure and encouraging investment in the emirate that has increased the value of real estate many fold in comparison with the values a decade ago.

Besides, the DLD Chief asserted that growth in real estate demand was due to an improving economy, not driven by speculators.

"Growth in demand from investors is a result of an improvement in fundamental economic factors, rather than down to speculation.”

The UAE Central Bank said on Sunday that low residential rental yields in Dubai and Abu Dhabi possibly indicate growing imbalances and overheating in the real estate sector.

“Current average rental yields in Dubai and Abu Dhabi are approximately 70 and 130 basis points below historical averages, which could indicate growing imbalances – overheating real estate market,” the Central Bank said in its financial stability report 2013.

“Monitoring developments in the UAE real estate markets and the banks’ exposure to it remains a core financial stability priority,” it stated.

House prices in Dubai rose nearly 28 per cent from a year ago in January-March, leading the global rankings for a fourth straight quarter, Knight Frank, a UK-based consultancy, said.

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