Panel planned to set up code of conduct for realty brokers |
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A brokers' association that will establish a code of conduct for its members is to be set up by the Real Estate Regulatory Agency (Rera), CEO Marwan bin Ghalita has revealed.
The organisation will be established once all the real estate agents in Dubai have registered with Rera. So far 5,154 estate agents, 1,806 brokerage firms and 842 developers have registered.
"Plans to create such an association are in the pipeline," said bin Ghalita. "We will form the entity once all the realty agents in the market have registered with Rera."
The agency is currently gathering details about best practices in countries such as Singapore and New Zealand as it prepares to set up the body.
Sana Kapadia, a research analyst at Egyptian investment bank EFG-Hermes, said: "The creation of a brokerage association will be in line with Rera's need to establish a proper structure in the market.
"There is always a lag between coming up with a plan and it being implemented. One area for such an association to consider is training - I don't think agents are properly trained.
"Rera should provide training in tandem with the agents, this would help to speed up the current sales slowdown in the Dubai market. However an initiative like this can boost confidence in the market in the longer term."
However, some analysts believe a brokerage association will not achieve much unless it establishes a multiple listing system (MLS).
A MLS is a group of databases that enables brokers to share information about properties that are up for sale.
Robert McKinnon, Managing Director, Research, at Al Mal Capital, said: "It is becoming very hard to buy a property today in Dubai without a MLS. Such a system would improve efficiency in the brokerage industry and raise levels of transparency in the market.
"Transparency is a trust issue - it is very difficult to trust an agent today when you know you could be getting a lower price somewhere else. A MLS would make it hard for an agent to sell a property at a price above or below existing market rates.
"Sellers speak to a lot of brokers to determine the best price. With an MLS, a seller can get only the prevailing market price. The system would speed up the sales process, thus increasing liquidity in the market."
Gowealthy CEO Peter Penhall said: "Such an association would have to be run properly by a professional entity that comes under Rera."
Heike Drewniok, President of American-based estate agency Blu International Realty, said the MLS launch was not essential at present as the property market was very strong. But such a system would help the market by boosting the chances of a particular project achieving sales.
"The only big difference between the way the real estate sector operates in Dubai and what is being done elsewhere is that brokers in other countries work with each other, even if they are employed by different companies," Drewniok told Emirates Business.
"With respect to multiple listings, all brokers in America enter details of their properties - even ones that are being sold through exclusive tie-ups - into a computer system that can be accessed by all listed brokerage companies.
"Any deal struck by any agent results in the sharing of commission among all the agents. This helps brokers such as ourselves and others to consistently earn commission during the sort of hard times we are going through in the US.
"The system works particularly well when the market is not very strong since people want to improve their chances of finding a buyer."
Penhall added: "Resale figures have slowed down radically in the short term in Dubai but we expect the market to pick up very strongly towards the later part of this year.
"People have panicked recently and have over-reacted because of a sense of fear instead of thinking logically and analysing the situation. When sanity comes back into the market there will be more sales and they will happen faster.
And Drewniok said: "The sales slowdown in Dubai is really not as grave as it is made out to be. People in Dubai are used to a building selling out in a day. The sales you see today in Dubai are what used to happen in America five years ago.
"Dubai is still a very good market. Rentals are so hard to find here and one has to be prepared for the rental market to go up because a lot of people can't afford to buy property."
Blu International Realty operates in the UK, France, Germany and Egypt as well as the UAE. In the US, the company has seen a six per cent increase in sales volumes in a single county in Florida in the last six months.
"Fortunately for us, Florida has been able to stay a bit insulated from the crisis, though the financial tsunami has hit every sector and individual in the US," added Drewniok. "Right now is an excellent time to buy in America as prices are almost 50 per cent below what they were three years ago - and most of the properties are brand new. Florida is a little different from the rest of America since you get value for the money you invest. Lot of Europeans and South Africans have been looking keenly at investing in the US."
By Anjana Kumar
© Emirates Business 24/7 2008
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