Service charges – unjustified or necessary?
Villas are looked into by both investors and end-user as the maintenance is much lower than the buildings and the returns are around 6-7 per cent.
For the end-user the EMI + maintenance is affordable. This is the reason why the villa market is rising rapidly as compared to apartments.
According to market sources, for example, Saheel Type 7, 3-bedroom+maid villa with a BUA of 3324 sqft was selling for Dh2,300,000-2,500,000 during Jan-March 2011, but jumped to Dh2,650,000-2,800,000 in July-October 2011.
“The selling prices have jumped more than 10 per cent due to this positive aspect. The same has happened to all villa communities,” says Rushiraj Mehta of Legacy Real Estate.
He believes that apartment maintenance has to be lowered drastically in order to support a positive market towards these units.
“The best way would be getting in strata communities, handing over the buildings to the owners and letting them manage, enabling them to choose contractors and maintenance companies, which would be much lower than the amount charged by respective developers. Thus, lowering maintenance amounts increasing the ROI and also helps in paying less for the end user,” Mehta says.
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