By Mirna Sleiman
The emirate of Dubai will double the registration fee charged on real estate transactions in an effort to prevent excessive speculation in its property market, a top official said on Thursday.
The fee will increase to 4 percent from 2 percent on Oct. 6, Sultan Butti Bin Mejren, Director General of the government's Land Department, told reporters. Warehouses and industrial property will be excluded from the increase.
"It will affect the quick selling of property," he said. "It will limit the flipping of property and protect the market."
"Flipping" is buying and selling properties in quick succession to make speculative profits.
After crashing more than 50 percent as a bubble burst in 2009-2010, pushing Dubai close to a debt default, residential real estate prices are rebounding strongly and the International Monetary Fund warned in July that the authorities might need to intervene to prevent another bubble from forming.
Apartment prices are up about 20 percent this year, helped by an influx of foreign money.
Sultan Butti said he did not believe a new bubble was forming.
"The real estate market here is mature and based on real demand for property. The market is stable and is very active. We believe that prices in Dubai are not higher than other top cities around the world," he said.
But he said: "The IMF warning came in line with our findings and that is why we think that increasing the fees will limit speculation and protect from a bubble. We decided to increase these fees before they even recommended it."
On the issue of whether the higher fee could hurt the property market, he said: "We don't see a negative impact affecting the transactions."
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