A dozen executives from the country’s top real estate companies convened at Propertyfinder Group headquarters last week in an on-the-record quarterly forum. The group discussed these hot-button topics as well as their thoughts on the off-plan boom, the effectiveness of Trakheesi, and the ability of social media to sell property.
There is much on the minds of real estate executives in the UAE, and Propertyfinder Group wants to lead the discussion.
“Propertyfinder is an advocate of best practice for the UAE real estate sector,” said Paul Stewart-Smith, Chief Operations Officer of Propertyfinder Group. “Convening a group of leading brokerages allows us to listen, facilitate discussion, and drive thought leadership.”
The group that gathered for the CEO Breakfast talked about the surge in off-plan transactions, interest rate hikes, changes in social media, and the first year with the Trakheesi system, one of Dubai’s largest-ever clampdowns on professionalising the real estate market.
“Are we sleepwalking into the next big problem?” asked John Lyons, Head of Sales & Leasing at Espace, referring to the booming demand in off-plan real estate spurred by enticing payment plans luring first-time homebuyers.
“If [buyers] lose their job, they are in trouble. There is no oversight, no regulation,” Lyons added, to nods of agreement from around the room.
He noted the mortgage cap that safeguards the secondary market, but said there is no such oversight for off-plan buyers, where down payments of less than 30 per cent with the balance due on delivery of a project are becoming the norm.
Mark Towers, CEO of Edwards & Towers, also took a cautious stance. “You can’t help but get enthused that the off-plan market has been amazing,” he said. “But you have to keep an eye on it.”
Wissam Karmouchy, Managing Director of Gold Mark Real Estate, pointed out that for end-users who cannot afford to access the secondary market, off-plan is a viable option.
An even better option, said Zarah Evans, Managing Partner of Exclusive Links, would be more rent-to-own schemes.
“How many people come here thinking they’ll stay a year, and instead end up staying for five?” she asked.
Evans said she wants to see developers cater to those residents who could be paying down a mortgage rather than renting, with rent-to-own schemes introduced on a wider scale. She said Dubai shouldn’t be fostering a rent-forever generation, instead enabling residents to get on the ownership ladder with looser buying requirements supported by robust oversight.
Also top of mind for 2018, according to the group, is the potential for interest rate hikes. Brokers can make the case to buyers that there is a currency incentive to invest in property with a weak US dollar. But mortgage debt in Dubai may be harder to carry if rates go up.
With Trakheesi well into its second year, the effectiveness of the system put in place by Dubai’s Real Estate Regulatory Agency (RERA) is witnessing the first wave of effect, according to the executives. One of Trakheesi’s purposes is to sweep out fake property listings on online portals by requiring a permit number for brokers to list the property, which it has largely succeeded in doing. While agents are working to comply, the system could be better monitored, the real estate pros said.
Finally, keeping up with the steady knock of new technology – particularly changes with social media – is a constant demand. While Facebook and Instagram are fun ways to give a look behind the scenes and build a brand, the platforms are not places for selling property, according to brokerages.
But Paul Christodoulou, Chief Operating Officer at Aqua Properties, a hybrid developer-real estate agency, begged to differ. “Twenty percent of our projects in JVC get sold on social,” he said.
The feeling that WhatsApp is the new face to face between agents and home seekers is an interesting quirk of the local market. The Facebook-owned messaging platform presents a huge business opportunity, but executives mentioned concern of constraints from mobile carriers, like the blackout on Skype, just as WhatsApp is becoming more business-friendly.