he two percent trading commission and four percent DLD fees will no longer be financed by UAE banks as of February 1.
Beginning next week, buyers of real estate who choose to take out a mortgage will be required to pay the brokerage and Dubai Land Department (DLD) fees as part of their upfront costs.
According to professionals in the real estate sector, banks used to finance DLD’s 4% fee and brokers’ 2% fee as part of the overall mortgage.
“The four percent Dubai Land Department (DLD) fees and the two percent brokerage commission for property buyers seeking mortgages will no longer be financed by UAE banks as of February 1, 2025,” stated Rohit Bachani, co-founder of Merlin Real Estate.
Bachani went on to say that banks usually only mortgage fixed assets and don’t support these costs in the majority of developed economies, such as the USA and the UK.
“This modification is a step toward conforming to global norms. The market will eventually adopt the new norm, despite the possibility of an initial hiccup. The mortgage borrowing process won’t be impacted in the long run. In fact, it is anticipated to keep expanding given the thriving business,” he stated.
According to Springfield Properties CEO Farooq Syed, banks will stop accepting brokerage and DLD fees for mortgages starting next week.
How will it impact off-plan properties
Because purchasers now require more funds to purchase secondary market real estate, particularly if they are taking out a mortgage, this recent action will make off-plan more alluring.
Because purchasers will need less money up front, developers who offer lengthier payment plans will be more appealing options. Six percent more is a lot for a buyer of real estate. Due to cheaper down payments and fewer obstacles to entry, more consumers will choose off-plan and main properties, he continued.
The CEO of Springfield Properties anticipates that this will result in some downward pressure on pricing, which is necessary to stabilize and maintain a healthy market.
The government is taking this action to prevent the market from overheating. “It is a crucial step to maintain price control,” Syed added.
Rohit Bachani went on to say that because buyers will have to pay for these expenses up front, the initial payment may be larger, which could have an immediate effect on the market.
“For example, this entails an extra Dh60,000 down payment on a Dh1 million deal,” he continued.
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