IQI Dubai Weekly Recap 14th – 20th October 2017

VAT on the way.

With effect from January 1st 2018, valued added tax (VAT) will be a reality in the UAE. As the real estate sector affects most expat lives in the UAE, let us take a look at the implications of the new levy on this industry.

Commercial property (sales and leases) will be subject to the standard rate of VAT (five per cent), residential property (sales and leases) will be exempt from VAT, with the exception of the first sale of new residential property, which will be subject to the zero rate of VAT, and bare land will be exempt from VAT.

Source: Khaleej Times

Dubai’s Q3 off-plan sales value jumps 118 per cent

Residential property transactions in Dubai are rising, but the price trajectory remains unclear as developers selling off-plan units drive down prices in the affordable housing sector and create a stock of low-quality residential units in the emirate, brokers said on Tuesday.

“As we enter the final quarter of 2017, a year in which most market players expected the Dubai residential market [prices] to bottom out, there remains a clear lack of direction,” said the broker. “Despite higher year-on-year transaction volumes, uncertainty and concerns of oversupply have produced divergent sale price trends and further market fragmentation between performing and non-performing communities.”

Source: The National (UAE Edition)

Damac’s Q3 profits down 20% as cost of sales soar

Profit for Damac Properties, the Dubai real estate developer and operator of the emirate’s Trump International Golf Club, dropped 20 per cent in the third quarter, coming in below an analyst estimate, as the cost of sales leapt 70 per cent.

The developer reported a net profit of Dh719 million for the three months to September 30, down from Dh902m a year earlier. The figure came in below an estimate of Dh780m from EFG-Hermes.

Damac’s revenue rose by 30 per cent to Dh2.29 billion for the quarter, coming in ahead of EFG’s estimate of Dh1.8bn, helped by a surge in international sales to nearly Dh1bn from Dh20m in the same period last year.

Source: The National (UAE Edition)