Daily property transactions jump 5 times ahead of transfer fee hike

The number of property registrations in Dubai has jumped manifolds in the past two days with some registration trustees planning to keep offices open for 12 hours to meet the massive rush expected on Thursday, the last working day before the transfer fee is hiked to 4 per cent from 2 per cent.

“In the past two days, the number of transactions we register are almost five times more than what we do daily,” the office manager of a registration trustee told Emirates 24|7.

“Now, we are working from 8 am to 5 pm, but we plan to extend our working time to 8 pm on Thursday as we expect a huge rush of investors.”
He revealed owners, who had not previously completed property registration process, were rushing in to complete their transfer.

Registration trustees charge Dh2,000 as fees for transactions below Dh500,000, while any deal above Dh500,000 the fee is Dh4,000.

This website reported that the daily transactions crossed the Dh5 billion mark on Sunday, the highest recorded in the department’s 52 year history.

Emaar Properties, in an email sent to customers earlier this week, said: “In light of the recent announcement from Dubai Land Department concerning increase in the transfer and registration fees, we would like to advise you to complete the transfer of title of your property within this week.”

A property owner, who visited Emaar’s sales office on Monday, said there was a long queue with people waiting to get the required registration documents.

“On Monday, when I went to Emaar office I was given the token number 131 at 10.30am,” Mehal, who only gave his first name, said.

Mortgage buyers hit

But mortgage customers are likely to be burdened, having to pay the additional 2 per cent in transfer fee as banks generally take over 15 days to complete all formalities to initiate transfer.

(Read: Your step-by-step guide to taking a mortgage in Dubai)

“In Dubai, the price is net to the seller. Since completing the mortgage formalities will take time, they will not be able to take advantage of the 2 per cent transfer fee applicable till October 4,” Mahendra Singh, Managing Director, SPF Realty, told Emirates 24|7.

He, however, believes that not more than 10 per cent of the deals will be cancelled.

“The price appreciation in Dubai is far more than the 2 per cent increase in transfer fee that the buyer will have to shell. If it’s a good deal, then the buyer will pay regardless of any fee hike,” he added.

A report from UK-based Knight Frank said that property prices in Dubai have risen by 22 per cent year-on-year and the market is likely to witness further gains after Dubai’s expected win to host the World Expo 2020.

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