Dubai developers waive 4% property registration fee

With market under pressure, some
developers have been offering incentive on
a short-term outlook to boost their sales
on off-plan properties, or instance,
developers are waving of registration fee
fully or partially to attract investors. as
sharing cost puts less burden on
investors
DUBAI property developers are waiving
off four per cent property registration
fees in order to attract new buyers to
their off plan or under-construction
projects, ‘Emirates 24|7’ can reveal.
Azizi Developments, which is building a
number of residential projects in Al
Furjan, will be paying the four per cent
registration fee for buyers in some of its
projects in Al Furjan.
“We will be paying the registration fee,
or Oqood, for new buyers in some of our
projects and the offer will be valid for
the first week of November 2015,” a
company spokesperson told this website.
Gulf General Investment Company
(GGICO) states on its website that it will
pay four per cent registration fee for
apartments in its Topaz Residences in
Dubai Silicon Oasis but the fine print,
however, states it is ‘limited to Topaz
Residences 3 new purchases’.
“Construction has reached over 20 per
cent with ongoing progress in a
community with complete
infrastructure,” the developer said,
adding, it is offering affordable payment
plan (35 per cent before completion and
65 per cent after completion over three
years.)
Union Properties will also be paying half
of the four per cent property registration
fee on behalf of the buyers in its Green
Community West phase three.
We will be paying two per cent of the
registration fee on behalf of the investor.
Besides, we will be offering a flexible
payment plan of up to eight years post-
handover,” a senior company official
told this website during the launch of the
project last week.
Parvez Khan, chairman, Pacific
Ventures, confirmed to this website that
his company was planning to offer
similar incentive to new investors.
“Currently market is under pressure and
so waving of registration fee fully or
partially is just promotion to attract
investor as sharing cost puts less burden
on investors,” he added.
Despite the lure of saving quite a bit of
money, Parvees A. Gafur, Chief Executive
Officer, Propsquare Real Estate advised
investors to be cautious.
“Some developers have been offering
this incentive on a short-term outlook to
boost their sales on off-plan properties.
It has not become a regular trend
though. Again buyers have to do their
homework well on the project they are
buying into and its offer suits their
investment acumen,” he added.
Though earlier only selected developers
waived transaction fee, but were mostly
offering freebies ranging from furniture
vouchers to new home appliances, from
holiday packages to cars.
In August 2015, Lookup.ae, a real estate
portal, estimated that 120 new projects
were launched in Dubai in the past 24
months.
In the same month, an analysis by Unitas
and Reidin.com on the evolution of off-
plan payment plans found that the price
trend has a direct impact on the degree
of flexibility offered by developers.
“As prices began to rise in 2013,
developers offered aggressive payment
plans to buyers. However, as prices
began to dip towards the end of 2014,
payment terms begin to get skewed
towards the end of completion,” they
said, stating that the degree of flexibility
was higher in private sector developers.
In March 2015, Mashreq, a leading UAE
bank, said in its Wealth Gauge report
that innovative payment plans were
need of the hour as back-loaded
schemes, especially for off-plan
properties (where developers were
asking for chunk of the payments to be
made only after the unit was handed
over), were in demand.
Meanwhile, after offering to pay the
property registration fee, developers in
Dubai are now offering guaranteed
rental income plans to attract global
investors.
Damac Properties, one of the largest
private developers, is guaranteeing 24
per cent, or an eight per cent rental yield
per year, for three years to their unit
buyers.
The developer, in a statement, said
owners will be able to receive eight per
cent a year returns for the first three
years following the handover of the
units.
“We strongly believe that Dubai is set for
stable growth in the medium term and
we are backing that up by offering a 24
per cent rental guarantee to give
reassurance to buyers,” said Niall
McLoughlin, Senior Vice-President,
Damac Properties.
He admits that they have seen quite a bit
of scaremongering in recent months
which can have a detrimental effect on
sentiment in the market.
“By providing such a high, tax-free
offering on our units, we are putting our
head above the rest and underwriting
any fluctuations that may occur down
the line. When you also factor in the
potential for capital growth, I don’t
know of a better, more secure
investment opportunity anywhere,” said
McLoughlin.
Knight Frank’s The Hub reports reveals
that a $3 million investment in Dubai
real estate in 2008 would have fetched
$4.8 million in 2014 which is higher
than global cities such as London, Paris,
New York, Hong Kong, Singapore and
Sydney.