When the plans of strengthening emirate’s property regulations and set of rules start to take function, real estate market in Dubai will face a big disturbance. One of these plans, the need for all agents to have a relevant qualification, has become the remit of the Dubai Real Estate Institute.
The creation of the Dubai Real Estate Institute (Drei) comes partly as a response to the emirate's Real Estate Regulatory Authority's (Rera) move to tighten working practises by enforcing the need for realtors to have a professional qualification.
Although this initiative has not been much publicised outside of property circles, it is already illegal for agents to undertake new deals without holding the right qualification.
While Rera enforces the regulation with the thousands of agents in Dubai, members of the public are being advised to also check for themselves that their property consultant is fully qualified before launching any agreements.
'Rera wants all practising real estate agents to be certified in the laws, practises and regulations that govern the Dubai property market,' says Dr Salim Alshafiei, Drei's Managing Director. 'Previously anybody could enter the market without being licensed or even trained.'
Drei is an independent body, which was founded last year by a group of companies including Dubai World, Dubai Properties, Sama Dubai, Mizin, Tatweer, Emaar and Dubai Islamic Bank.
Real estate training programmes
Three months ago the institute signed an agreement with Rera to provide qualifications for people looking to become certified real estate agents.
To this end Drei runs a number of training programmes, including a Master's degree in Real Estate Development, that are certified by international academic bodies in the US, UK and Australia.
A further Ma, in Real Estate Finance and Investment, will be offered from the next (2009-2010) academic year.
Around 500 Dubai-based realtors have passed the first set of qualifications so far, and a further 1,500 are scheduled to take the course over the next two years.
'We believe that the market needs to be highly regulated in terms of what people need; things like mortgage brokerage or legal advice,' says Alshafiei. 'There are thousands of people involved in this process, and they all need to be trained and regulated.
'There are many cases where a lack of training can result in enormous problems. Look at the sub-prime mortgage crisis in the US - one of the problems there was a lack of proper brokerage training, unqualified people were failing to look into risk assessment and things like this.'
'Dubious' business practices
Alshafiei believes that the enormous number of unregulated people involved in Dubai's mushrooming property market has meant that certain dubious practices have become ingrained in the process of undertaking real estate transactions.
'Our certifications include a course on ethics,' he says. 'Sometimes people here use certain practices because others do, without thinking about whether these methods are ethical or even legal - people need to know what the regulations are, just as in a mature market.'
Initiatives like this are going a long way towards helping to stabilise Dubai's property sector and setting concrete benchmarks for those involved in the emirate's lucrative real estate market.
'From the point of view of Better Homes, we have always strived towards strong business practices and we welcome the fact that all other agencies operating here will now be forced to up their game,' says Billy Rautenbach, Director of Operations for Better Homes.
'The introduction of exams for consultants is positive news for everyone within the industry and we look forward to continued improvements in standards through RERA regulations.'
Continued regulatory enforcement can only have a positive outcome for investors looking to take advantage of the property boom.
