Dubai’s transaction fees will help recovery of UAE property market

Dubai’s transaction fees will help recovery of UAE property market

Transactions fees and a cap on mortgages will help the property market in the UAE.


  • Transaction fees of 4% will help stabilise the Dubai property market
  • Caps on mortgage lending will also boost the sector
  • Limiting loan-to-value rates for residential mortgages is aimed at protecting investors

Plans to raise transaction fees for property purchases in Dubai will help the real estate market in the United Arab Emirates (UAE) to recover.

Fitch Ratings stated that caps for mortgage lending could boost the sector by limiting risks for UAE banks. In addition to this, the new 4% transactions fee, which came into effect on October 6th, will help prices in Dubai rise at a more “sustainable level”.

“The higher fees go some way towards helping to prevent excessive speculation, particularly where a high proportion of purchases and sales are purely cash driven,” a spokesperson for Fitch Ratings stated.

Banks in the UAE are continuing to deal with problems from the 2008 financial crisis when real estate investors were exposed to non-performing loans. However, these new measures, which include imposing maximum loan-to-value limits for residential mortgages, are intended to prevent these issues occurring again, providing a safer, more secure environment for property investments in Dubai.

This, in turn, will encourage more financiers buying property in Dubai, especially after the 2012 City RepTrak report revealed it is the best city in the world to invest in.

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