By Neil Halligan
Four new regulations will be introduced to curb the number of brokerages and improve standards
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.For all the latest real estate 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.
first we need some good solid rules and regulation on the rents for residents.. maybe focus energy on making the UAE a global leader in professionalism of the rental market..
implement a law to say a minimum of 6 cheques a year for rent , or go as far as monthly like everywhere else in the world outside the GCC
make landlord responsible for the upkeep/maintenance of their properties rather than put every responsibility on the tenant, oh and one more thing make it illegal to keep security deposits as this is still rife
There has to be some sort of ranking - based on customer satisfaction, sales, professionalism, customer care and after service - since agents make tons of money (percentage of sale and rent)
Agencies that fall at the lowest five percent yearly, get their license revoked.
This way you create rules, better service, quality and you get rid of the junk.
Well I have done real estate in the emirates for the past twenty five years.
I still got cheated by a Pakistan Agent.....
I have retired now......he still owes me money.....I do have a lawyer dealing with my case........also the police......and I know he is still operating in the emirates....
So I think it should be like anywhere else in the world when people buy a villa or an apartment it should be handed over to a lawyer.......this way it stops all frauds.....
also when it is rented out to a person or company the landlord should pay the commission like the world over.......... NOT THE TENANT.........
I would have thought that the regulator's emphasis would be on the quality of the brokers; whether there are too many or not should be a simple matter of market forces - if there's not enough business for them all then some will be forced to close, same as any other industry.
Rather than putting restrictions on the numbers of brokers, it would be better to put a robust complaints procedure in place, so that rogue agents can be removed from the market quickly.
I would certainly agree with banning anyone who cold-calls, I am fed up with these people and would never give any business to anyone who does this.
It is extremely simple to reduce the numbers in this industry. Make it statutory that the landlord pays the commissions and NOT the potential buyer or tenant. An official mandate should be required and shown to a prospective tenant or buyer at the time of viewing. This can be easily registered online with RERA and printed out.
This gets rid of this whole "sub-agent" culture whom the seller or landlord knows nothing about. These agents surf and publish on Dubizzle or similar. They take a property and mark up prices themselves fishing for custom. When they get a call they scurry around to find the lead agent and do a deal. If they can't do a deal, they call back and say it's gone, offering you something else.
I am currently looking to rent a property and its a complete dog show trying to do business in this market!
Dont worry about the number of brokerages and realtors. If the basics were set up and there was organization then the strong will survive, and the rest will pack up and leave.
What you need is a CENTRAL LISTING SYSTEM, so you dont have 500 agents listing the same property! A waste of everyones time.
Well i simply Thanks to The Regulator, who are open minded and discussing in public & realistically willing improve the market , Look @ where we were standing in 2008, & Look at now !! Great JOB by RERA..
Agree with Arw. They not only get security deposit but now a days they force you to sign an "End of Contract" letter even before moving to that place, so basically you are renting for 1 year and after one year you have to leave (they wuill see if the rents have become higher, they will force you to leave if less they will ask to renew), WHY because they will rent it again and make more commission, I had a fight with one of the agent yesterday when he presented me a letter and asked me to sign.
The tenant or buyer pays the commission regardless of whatever rule is put in place. If you made the owner pay the commission they'd just put it into the price. Which they already do by the way, it's called a kickback to the agent! Not everyone does it but most try to do it at some point, both the agent and the owner. It's simple the owner wants 100k, the agent gets 110k, the owner gives him 5k and the tenant gives 5.5k comms , everyone is a winner except the tenant!
I think what the are trying to do is force the idiots out of the business. There are plenty of them. I didn't see any mention of a limit on numbers, only that RERA feels there are too many. Due to the number of them, the clients aren't getting a good level of service from most of the agents as they are too busy trying to earn a crust. There are some diamonds out there though, 1 or 2 firms which are ran really well.