By Andy Sambidge
Nakheel say buyers at the Palm Jumeirah development must wait a year before selling on.
Buyers at the Trump International Hotel & Tower on Palm Jumeirah will have to wait a year before they can sell their apartments on the secondary market, Nakheel officials have announced.
The decision to restrict buyers at the sought after property is part of a growing concern among major developers about high-speed speculation in the market, reported UAE daily The National on Tuesday.
Emaar, which is building the Burj Dubai, is also one of the developers restricting secondary sales of its properties until buyers have paid 30 per cent of the cost. Others are setting up transfer fees that give buyers incentives to hold onto their apartments for longer.
Last week, Standard Chartered said the Dubai government should take action immediately to stop rampant speculative activity across the emirates’ property market.
Marios Maratheftis, regional head of research at Standard Chartered, told Arabian Business the government must act “as soon as possible”.
According to Colliers International, property prices in Dubai rose 42 percent in the first three months of 2008, well beyond Standard Chartered’s forecast of 15 percent for the entire year.
The bank's research revealed prices were being inflated by short-term buyers who were on-selling their properties, even before their first installments were due, with the sole intention of making a quick profit.
Maratheftis said the situation was so urgent, the government should impose a capital-gains tax of at least 50 percent on profits from properties purchased and sold within a 12 month period.
Buyers who held onto their property for longer should be exempt, he added.
Property prices in Dubai have soared since foreigners were given the right to own real estate in limited areas in 2002, with demand surging past supply on rapid population growth.
Buyers of Trump were made aware of these restrictions before purchasing or at least i was. This isn't something thats been added later to prevent speculation as suggested. With regards to the gentle man in SCB, he is out of his mind if he thinks adding a 50% capital gains tax for people who have already bought property and want to resell in a year will be a positive thing for Dubai or its image. A total collapse of confidence and property prices will follow a sudden introduction of such a tax. If he followed the market and really was an expert he would already know this is the slowest summer Dubai has experienced in real estate since inception, he would also know this law could be bypassed by putting the property in a off shore company and then selling the company and furthermore he would also know that the outflow of investor money would hinder developers and their knew launches, since end users always wait till almost completion and investors kick the projects off and provide developers with money, hype and credibility.