Dubai’s Land Department is set to turn a spotlight on cowboy real estate surveyors in a bid to clamp down on inflated property valuations, a senior official told Arabian Business.
Tighter rules will force out unqualified surveyors from the market in a move aimed at ensuring real estate valuations accurately match the worth of the property, said the official, who asked not to be named.
“We are working on legislation to allow us to regulate valuers and register them,” said the DLD official. “The date of release is yet to be confirmed, but we provided the draft legislation two years ago and we are nearly there.”
The agency is also hoping to speed up the release of property sale data to the market to allow buyers and surveyors to check asking prices with recent sales data.
“[We want to get] the transactional data out to valuers so they can check the sales in the last six months,” said the official. “If you don’t have it, that’s when valuers start using other formats.”
The collapse of Dubai’s property market has increased scrutiny on transactions after billions of dollars worth of developments were scrapped or put on hold in the wake of the financial crisis.
Houses sold at the height of the emirate’s speculator-fuelled real estate bubble have seen more than 60 percent wiped off their value as investors fled the market and property sales dwindled.
Dubai’s real estate watchdog, RERA, said in March it was reviewing the financial viability of about 90,000 properties due to be delivered over the next five years.
Many buyers who purchased property in the pre-2008 boom years have found their valuations were grossly inflation, leaving them facing huge mortgages or the risk of foreclosure.
“During the boom times, many banks and institutions were lending vast amounts of money to developers and speculators alike off the back of one or two-page valuation reports produced by non-professionally qualified valuers, who often gave opinions of worth as opposed to market value,” said Samuel Morris, real estate manager for the Middle East at Deloitte.
“Most of the mistakes made were swept under the carpet through rapid growth in capital value, but people are since starting to wise up to these cowboy firms.”
Many developers are opposed to tighter curbs on surveyors, fearing a backlash from investors whose properties will be worth significantly less than the buying price, he said.
“[Some developers] have historically sold real estate quoting a certain square foot or metre, not measured using an established methodology, and so in some instances they have included such things as flat roofs, garages, car parking bays and gardens within their measurements,” he said.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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