Dubai: The control that the leading developers exert on Dubai’s off-plan supply also extends to secondary market transactions.
“The way they do it is by facilitating no-objection certificates (NOC) on all secondary market transactions,” said Sameer Lakhani, Managing Director at Global Capital Partners. “For instance, the average time in granting an NOC has increased from three days to 11 days in 2014, based on our records. This could happen as a master-developer could block or delay handing over the NOC in case there are outstandings owed by the seller.
“In other markets, it’s the homeowners associations who have the rights to handle the purchase and sale of units within completed projects. The current scenario in Dubai has lent a hand in a substantive decline in secondary market deals — down 36 per cent year-on-year — compared with primary sales, which registered a near threefold increase over the same period.
“On the plus side, this has resulted in dampening secondary market price volatility and facilitated in promoting investor confidence. But brokers have suffered from the decline in transactional activity, and that’s a negative.”