Move aimed to attract new buyers to off-plan projects
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 10 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.