HOW WILL SERVICE CHARGES FARE IN 2023?
To get a drift of how would service charges for 2023 fare, Gulf News
spoke to Aayush Puri, Head – GCC Operations at Anacity, which is building up an impressive portfolio of managed properties in the UAE.
Dubai will see a near recordbreaking handover of freehold homes this year. At least on these buildings, do you reckon that service charges could remain intact for the first 3 years or so?
Many buyers in Dubai are concerned about the potential costs associated with owning a property — such as service charges. In the current market, it is possible that service charges on freehold properties in Dubai could remain unchanged for the first few years after handover, as developers attempt to reassure buyers by offering fixed service charges for a duration of three to five years.
Some developers may also choose to absorb these charges themselves in order to attract buyers.
It is worth considering that the decision to offer fixed service charges for a specific period is ultimately at the discretion of the developer, and may vary between projects. Potential buyers should carefully review the terms of any fixed service charge agreement and be aware of any potential changes that may occur in the future.
Many property owners, prospective ones, are talking about high service charges — and the fear that these could increase further. Are these concerns out of place?
It seems that these concerns may be unfounded, as service charges in the city have remained relatively stable. According to property management firms, while operating costs have increased significantly, they have been able to manage the situation so long as they are able to collect 70-75 per cent of service fee payments. One factor that may contribute to the stability of service charges is the Real Estate Regulatory Agency (Rera), which has been working with Owner’s Association Management (OAM) companies since 20192020 to reduce annual service fees collected by them. As a result, many locations in Dubai have seen cuts of 10-15 per cent on facilities management costs, which are often passed on to property owners.