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28 March 2024

Dubai property deals at Dh5.1bn

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By Parag Deulgaonkar

Total real estate transactions touched Dh5.1 billion on Sunday, Dubai Land Department (DLD) data reveals.

The rush was expected as investors, sellers in particular, look to save two per cent in transfer fees on the first day of business after the DLD announced doubling of the fee on September 26 to four per cent from two per cent.

The value of daily transactions was the highest in 52 years of the department’s history.

Total land deals registered were Dh2 billion, while apartments and villas registered were worth Dh1.7 billion.
Mortgages on land and apartment/villas were Dh515.5 million and Dh904.8 million, respectively, Land Department data showed.

Palm Jumeirah was the most active area with transactions crossing Dh640 million followed by Al Nahda first with Dh120 million.

The new registration fee, effective October 6, covers all property transactions in the emirate of Dubai except for the industrial sector, including warehouses.

DLD Director-General Sultan Butti bin Mejren has said: "The move is aimed to stop quick transactions (flipping) which are unhealthy for the market and result in sudden price increases.

“The decision has come at the right time. The market has matured and investor confidence is growing.

The move is not likely to have any negative impact."

Craig Plumb, Head of Research Mena, Jones Lang LaSalle, believes that though it is bad news for individual investors - an extra two per cent on the purchase price – it is good news for the overall market as it will hopefully reduce the level of speculative activity.

“It would be good if a skidding scale were introduced, whereby the tax decreases the longer you own the property,” Plumb stated.

Knight Frank, a UK-based real estate consultancy, said that though a bitter pill to swallow for property buyers in Dubai, the two per cent increase in property transfer fees isn’t likely to slow down the growth momentum in the market.

“Given that there wasn’t any forward guidance provided, investor confidence may take a hit in the short-term. Indeed, it may be taken as a sign that the market is vulnerable to sudden interventionist policy.

“However, we think that once the market has adjusted to this development, it is likely to be business as usual,” Khawar Khan, Research Manager, Knight Frank, said.