Investors complain about high bills ... and real estate developers propose a periodic review

Claims to control the relationship between real estate investment and service fees

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Real estate investors and potential real estate buyers have confirmed that there is an increase in the bills for fees for real estate services, calling on the real estate sector regulators to reduce those fees to encourage investors to enter the market.

They explained that despite the department's efforts to reduce service fees, it did not reach the desired limit, which makes real estate investment suitable for entry into it.

In turn, real estate experts pointed out to "Emirates Today", that there is an inverse relationship between service fees and the desire to invest in real estate, calling for controlling the relationship between real estate investment and those fees.

And they stressed that projects that reduce service fees are the best in real estate marketing, suggesting that these fees be reviewed more than once.

They emphasized that the ceiling for service fees is still high, despite the efforts made by the Real Estate Regulatory Agency, RERA, which represents one of the obstacles that prevent large segments of investors from entering the real estate market.

Investor opinions

In detail, the investor, Hassan Rafiq, said that he had bought a three-room housing unit from a real estate company, but the fees for the housing unit's services were very high, which caused a problem in paying these bills, which always come with high values ​​or close to the bills of 2019, before the «system Malak »who announced by the regulators that he will reduce these bills, which, at least for him, has not happened.

For his part, the investor, Yusef Ahmed, saw the existence of exaggerated estimates by the real estate developer of the service fees, calling on the regulatory authorities to carefully review those bills that are considered high compared to the services provided.

He pointed out that there are efforts being made by the Real Estate Regulatory Agency, but they did not reach the desired limit, because the expectations of reducing fees were very large, especially after the issuance of the new regulations.

In turn, the investor, Nadia Ismail, said that the high service fees make her hesitant about a decision related to buying a residential unit for the purpose of investment, despite the presence of liquidity in it, pointing to her receiving advice on the importance of checking the amount of fees that can be paid annually, as well as the real estate developer himself .

Investor Ahmed Zaidan agreed with his counterpart Nadia Ismail that he is considering buying a housing unit, but what worries him is the high fees for services and maintenance, especially as he buys the property for the purpose of investment, and reliance on the expected rental return.

He added that he postponed his decision to study service and maintenance fees carefully, calling on the real estate sector regulators to reduce fees to encourage investors to enter the market.

High fees

For his part, the real estate expert and general manager of the Royal Liwan Real Estate Company, Muhammad Hareb, said that most of the investment return earned by the real estate investor goes to service fees, which causes many investors to refrain from entering the real estate market, indicating that the service fees In some areas, it reaches 30 thousand dirhams for a one-room apartment.

He added that if the return is 7%, and the service fee is 3%, then this means that the real investment return is 4%, calling for the necessity to control the relationship between real estate investment and service fees.

He pointed out that the “Malak System” had not succeeded in controlling the market, despite the passage of more than seven months after its implementation, suggesting relying on clean energy to reduce the electricity bill, which constitutes a large percentage of service fees.

Proceeds and fees

In turn, the CEO of FAM Real Estate Company, Firas Al-Masdi, said: “The higher the service fees, the less the investor’s appetite to enter the real estate market, and the lower these fees, they will attract the investor.” Noting that the investor will deduct the fees from the expected rental returns. Therefore, the higher these fees are, the more they negatively affect the returns and, by extension, the value of the investment property.

Al-Masdi emphasized that the Dubai Land Department is making great efforts to reduce these fees, especially as they are various fees, and include many services, some of which are paid to the main developer, or the residential complex, and part of it is paid to service the construction itself, which makes the task difficult for the department.

Al-Masdi expected that “Dubai Lands” would succeed through the application of the “angel system” and the policy of non-conflict, to put in place great control over the facilities management companies, and he also expected to reduce service fees during the third quarter of this year.

Exemptions and sales

The CEO of Seven Line Real Estate, Mohammed Salman, agreed that there is an inverse relationship between service fees and the desire to invest in real estate.

He added that the increase in service fees leads to a decrease in the rental return that the investor expects, noting that the developed companies that provide exemptions ranging between three and five years from service fees are the luckiest in sales, as it encourages real estate investors to buy through these exemptions.

He emphasized that the "Malak System" provided by the Dubai Land Department has helped a lot in addressing this issue, as it checks service fees and tries hard to reduce service fees to a reasonable extent in order to encourage real estate investors, pointing to reducing service fees in most projects in Dubai. .

He pointed out that the ceiling for service fees is still high, despite the efforts made by the Real Estate Regulatory Agency, which represents one of the obstacles to the entry of large segments of investors who fear the impact of higher fees on them in the future.

He explained that most of the complaints are from owners who have invested in hotel apartments, as service fees in hotel apartments are always high.

He pointed out that the “Malak System” gave owners a voice in managing complexes and real estate, and did not leave that responsibility in the hands of one party, so that there would be no monopoly in making decisions related to real estate and its management.

Periodic review

In the same context, real estate expert Khamis Al-Zeyoudi said that projects that reduce service fees are the luckiest in real estate marketing, pointing out that the real estate investor is greatly afraid of these fees, and always tries to move away from them to projects that offer low-priced offers for service fees, or those that Free periods are given for these fees.

Al-Zeyoudi stressed the need to review these fees more than once, saying: "We must be realistic, as we are now in a period of challenges and competition, not in a period of boom."

Al-Zeyoudi agreed that the increase in these fees affects the investment return from the housing unit, because of what is deducted in exchange for these fees.

Al-Assaad expects to improve service charges

The real estate expert, Hisham Al-Asaad, said that the investor should take into account the importance of service and maintenance fees because they form the basis for maintaining the security of the area and the property.

He added: “The most important thing of all is the condition of the building, and this is reflected in the revenues and future rental demand,” stressing that negligence in these services can harm the residential complex or the property in which the housing unit is located, and can also make the return from it less, due to Poor service condition.

Al-Assaad expected the continuation of improving service and maintenance fees in the next stage, in conjunction with the efforts made by the Real Estate Regulatory Agency, to appoint auditors to review companies ’budgets for approval, stressing that the presence of a third party in RERA would improve the relationship between the owners union and the company specialized in maintenance.

Service fees in some areas reach 30,000 dirhams for a one-room residential unit.

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