By Ayman Alashkar
It's up to brokers to reform the city's property market, and here's how they can do it
Real estate is universal. It doesn’t matter where you are in the world. You cannot work, play, eat or sleep without it. Even lockdown would be impossible if not for property.
But Covid-19 has changed the real estate industry with a sudden, merciless force; one that can only be compared to a dormant volcano's unforeseen eruption. It's brought with it an economic uncertainty for which none of us were prepared. Markets don't like uncertainty. It's not good for business.
No more is that evident than in Dubai's vibrant and diverse residential real estate market. It takes nerves of steel for anyone to transact property in such unprecedented times; most people would rather wait things out. We saw that the moment coronavirus risk in Dubai became a thing. Quite suddenly, viewings ground to a near halt and property transaction levels nosedived. Sure, trades have been registered since the full severity of Lockdown kicked in. But the volumes pale in comparison to the start of the year, just a few short weeks prior.
Like the straw that broke the camel's back, Covid-19 galvanised Dubai's estate agents with a common purpose: innovate to survive.
Of all the participants that make up the real estate market, it's the estate agents that adapted the fastest. The volatility of their commission-based income makes them a perceptive bunch; highly motivated, even cunning at times. One thing they certainly are not, is slow to evolve.
For proof, look how quickly brokers have adapted to life under lockdown. Despite working from home, today’s agents have been seeing transactions through from start to finish without leaving their living rooms. They’re using technology to enable remote viewings and communicate with clients. They’re digitally marketing their properties and brands, with a smartphone and two thumbs. They’re even shaking up giant industry portals with the strength of their resolve. Not only are they adaptable. They are essential, because buying a property is the largest financial decision most of us ever make, and it's also one of the most emotionally charged.
It's precisely those emotions that make residential real estate a ‘people’ business. No property market, large or small, functions without brokers. Although real estate is made of bricks, agents are the mortar holding the market together - adaptable, motivated and essential. So now it falls upon these same agents to use their unique position in the real estate universe, and innovate the market for the good of us all.
They must focus on sustainable outcomes. Like creating a sense of trust in the community, and delivering an information-packed service to their customers. Customers are discerning. They don't want mere salespeople, order-takers, or product-pushers. Estate agents need to be educators, sharers of knowledge, and some have already begun.
I am a proptech entrepreneur, but I wasn't always so. I first joined Dubai's real estate industry in 2003. Over the years, I've seen the Dubai Land Department make many admirable improvements. The availability of information today is remarkable compared to those early days. The DLD's ambitions are equally noteworthy. But the quality of real estate data remains an issue. It's the elephant in the room that the estate agents and the DLD must address if they wish to truly innovate the industry.
In this ultra-modern, ever-evolving 21st Century city of ours, shallow real estate data doesn't cut the mustard. In the the DLD's pursuit of the highest standards of excellence, it's not enough to know that an unspecified property of a given size is transacted for a given price in a particular location, yet that's basically the extent of the market data provided.
In the UK, anyone can access data for any specific property, anywhere. Just enter the property's unique address to have its full details and entire transaction history, from when modern records began. In Australia, real estate data is intricately interwoven with demographic and socio-economic data.
So detailed is it, that for example you can instantly access the ages, education levels, and ethnic groups of the resident population of your target property's catchment area. You can retrieve the job category data of those residents, and even have statistics relating to how they commute to work, whether via public transport, private transport, by bicycle or on foot. Such a richness of data quality enables better informed decisions by property planners, developers, and investors.
One of the first lessons one learns about property is that it's a clunky asset class; illiquid - not like equities or FX. Therefore, real estate markets can never be economically efficient. In their best manifestations, property markets are semi-efficient. In Australia and the UK, greater data transparency means those property markets have achieved semi-efficiency. Market stability is the reward.
A healthy real estate market is one where you don't have volatile capital values, with short cycles and large peak-to-trough price swings. For Dubai's real estate market to achieve that hallowed semi-efficient status, a shift towards higher-quality data is crucial. Everyone will benefit.
As they came together to pressure multi-million dollar real estate portals into action, so Dubai's brokers must now collectively use their unique position to improve their industry, and serve their community; to work alongside the DLD into taking a more transparent and robust approach to data; our new oil.
Ayman Alashkar is the founder and CEO of proptech platform Overwrite.ai, which real estate agents use to instantly auto-write their property marketing descriptions in multiple languages.