x Abu Dhabi, UAEFriday 28 July 2017

Emaar makes move to prevent property flipping

The developer wants real estate agents to complete deals before the properties are resold.

The Dubai government has doubled transfer fees on each sale of property to curb flipping. Jeff Topping / The National
The Dubai government has doubled transfer fees on each sale of property to curb flipping. Jeff Topping / The National
Emaar Properties has taken a stand against real estate agents who buy off-plan developments with an eye to flipping them to end users.
“Led by robust demand and the strong economic growth, with the price of real estate units increasing, it was observed that a number of real estate agents are buying property for onward sales to end-users,” an Emaar spokesman said yesterday. “Therefore, Emaar has asked the real estate agents to not resell off-plan properties until the unit is completed and handed over. This is also aimed at providing more stability to the real estate market and to minimise the adverse impact due to heavy speculative practices.”
The resurgence in the Dubai property market has prompted the Government to bring in a mortgage cap and an increase in the transfer price of property to 4 per cent. Emaar’s statement is the first such deterrent by a developer.
“Two years ago Emaar would have been begging for brokers to buy. Now with the Expo and the resurgent demand it doesn’t need it,” said Michael Lunjevich, the head of real estate at Hadef & Partners. “Under UAE law you need all parties to consent for a contract to be assigned. Consent has always been forthcoming; maybe now Emaar will withhold consent so brokers cannot flip properties.”
The renewed demand for Dubai property resulted in hundreds of people starting to queue 48 hours before Emaar launched its Reem development in February. That was followed by heated scenes in October at its Cityscape stand reminiscent of the pre-2008 boom years.
ascott@thenational.ae