Dubai has too many real estate brokerage firms for the size of the city, the CEO of the Real Estate Regulatory Agency (RERA) said as he unveiled new regulations to reduce the number of firms operating in the emirate in the future.
RERA’s CEO, Marwan bin Ghalita, told a real estate seminar at Cityscape Global that 567 new brokerage firms have been established in Dubai in 2014 alone, bringing the total number of firms to 2,205.
“We are going to introduce four new measures to control the brokers. We had over 8,000 brokerage firms with 10,000 brokers at one time, but today we have 2,205 firms with 5,021 brokers.
“We saw 567 new firms setting up business this year and we believe the numbers are still high for Dubai,” Ghalita said.
Rera, the regulatory arm of Dubai Land Department, will introduce four new regulations next year, including:
- Increasing the pass mark for the mandatory test for renewal of broker’s license from 75 percent to 85 percent from the start of 2015.
- Broker cards will be phased out by June next year, with registration to be linked to an Emirates ID.
- New brokerage firms will be allowed to employ four agents for the first year and any increases to depend upon the firm’s transaction performance.
- Agents who have not completed a transaction for anywhere between six to 12 months will receive a letter from RERA warning about their performance and if there is no improvement, RERA will cancel their registration.
Speaking on the sidelines of the seminar, Ghalita said the AED700 ($190) licence exams are becoming harder. “It’s not about money, it’s about an industry. Everybody is saying the numbers are huge,” said Ghalita.
He insisted that anyone operating without an agent’s card should be reported to RERA.
“We always try to implement a regulation that will help the market, and enhance the services. We don’t just regulate for the sake of regulation. Nobody likes too much regulation.
“If we look at since RERA was established seven years back, and the development of the regulation in Dubai’s real estate market, we can see it’s a plus sign,” he said.
Ghalita said there is a need to communicate more with the market and deliver the message more, but said the message is still not getting through to some.
“After hundreds of emails and over 1,000 education series in Dubai’s real estate market, every morning I still receive a phonecall from an agent trying to sell me a property, even though direct marketing is not allowed,” he said.
The total value of real estate transactions in Dubai reached in excess of AED155 billion in the year to September. The total value of transactions in 2013 were AED154 billion, with brokerage commission reaching AED1.8 billion.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.