By Courtney Trenwith
Developers have also begun to clampdown on those selling properties on quickly, says JLL
The recent decision to double the transaction fee for Dubai property sales has been successful in reducing "flipping", the regional head of Jones Lang LaSalle (JLL) said on Monday.
The Dubai government last year increased the transaction fee from 2 percent to 4 percent in a bid to cool the market, which rose 22 percent in 2013.
Much of the growth in prices - the highest since the 2008-09 bust - was attributed to flippers - investors who buy off-plan and rapidly sell again at a markup, in what is considered to artificially inflate prices.
"We think there has been an impact. When you increase the transfer fee from 2 to 4 percent it does take a bit of steam out of the market," JLL head of research Middle East and Africa Craig Plumb said.
"And when you take into account that doubling of the transfer fee together with the other transaction costs, a potential flipper is probably looking at costs of 8 percent just to break even, so the tendency to flip has been reduced by one government measure that was introduced."
Developers also have moved to limit flipping.
Emaar has stipulated for some of its new developments that 40 percent of the total price must be paid before the purchasing agreement can be changed to another name.
"Others have said no one can sell until the property is ready," Plumb said.
"So the market is self regulating to a point."
Plumb also has predicted that Dubai property prices will return to their 2008 peak as early as the fourth quarter of this year.
Sale prices would continue to grow in 2014 but not as fast as the 22 percent recorded last year.
Rents also would continue on their upward trajectory and were expected to rise 10-20 percent, on top of the 17 percent recorded last year, he said.
Article says "has reduced" flipping.
This LaSalle lot say "think it has had an impact".
So no facts, no evidence just JLL wanting a press release.
Well done AB, keep the PR items coming.