Owners associations have to engage in a tightrope act to keep rates steady
Dubai: Can local service charges keep staving off the inflationary pressure that has caught up with just about every other facet of the property market?
“Service charges have started playing an important role in the decision making process for end-users, which is why moving forward with the buildings getting older, the charge will be questioned if increases do not match the services,” said Niraj Masand, director at Banke International. “Many buyers could opt out of certain buildings due to the service charges.
“It could be the recessionary trends of the last three to four years that had service charges remain steady or in some cases even dropped. However, moving forward, due to increasing costs it is expected that service charges will increase.”
It is also for the future to tell what the presence of newly launched developments will have on the service charge regime. Will the new projects come in at a much higher tariff than the existing ones? If yes, can service charges at existing buildings remain impervious?
Only time will tell.