The skyline of Dubai. ARCHIVE

Dubai’s property market faces a shake-up as buyers will need to pay 6 percent in fees upfront starting February 1. The new regulation, issued by the UAE Central Bank, prohibits banks from financing the 4 percent Dubai Land Department (DLD) registration fee and 2 percent brokerage fee. For prospective buyers, this means an increase in the initial cash required to complete property transactions since they will have to pay the two fees on top of the down payment. The DLD registration fee is mandatory, while the brokerage fee is customary in transactions. Combined, they represent a significant financial hurdle for buyers, particularly expatriates. Dubai’s real estate market, known for its high demand among expatriates, has historically offered flexible payment options, including developer-led schemes for off-plan properties. Analysts predict a shift towards off-plan projects, where developers often cover DLD fees or offer staggered payment plans. The change will also impact mortgage affordability. Under UAE law, expatriates and foreigners need a 20 percent to 30 percent down payment depending on the property’s value, plus the added 6 percent fee. The Central Bank's decision aligns with its broader strategy to ensure financial stability in the UAE’s real estate market. While the new regulation imposes financial challenges, it may drive innovation in the market, encouraging developers to create attractive offers for a competitive edge. ICA/Expat Media
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