In Dubai, property broker commissions rise further - some are getting gold too
Offplan sales commissions shoot up again, and some developers now have gold as incentive
Dubai: Commissions for property brokers in Dubai are getting bigger – and on some projects, developers are sweetening their offer further with gold being part of the reward scheme.
All this is happening even as offplan sales in Dubai continue to put in more growth, with only April seeing a slight dip in demand. That, of course, had more to do with the disruptions brought on by the rains than anything to do with property market dynamics.
In recent weeks, developers have picked up the pace of new launches, with some days seeing multiple launches happening in the city. (The offplan action is also driving the property market in Ras Al Khaimah, with developers such as Dar Global making an entry with ‘Aston Martin’ branded homes.)
In Dubai, “Private developers are aggressively upping the commissions for their new projects, offering as much as 10-12 per cent (dependent on the value of sales done),” said Adnan Ahmed, CEO of Square Roots Real Estate. “These used to be 6-8 per cent on average earlier.
“These are for offplan projects primarily in Arjan, Furjan and JVC (Jumeirah Village Circle) and data indicates that brokers have been successful in driving sales to these areas in the year-to-date.”
Different with master-developers
Property market sources emphasize that higher commissions are only happening with private developers. “The likes of Emaar and government-owned developers have mostly retained the 4-5 per cent commission structure for brokers,” said an agent. “Their brand image and legacy doesn’t require them to offer higher commissions even in this ultra-competitive market.”
There’s the gold too
Gold as a reward for brokers is a more recent occurrence. “These are ‘lucky draws’ that have brokers getting instant commissions as well as up to 30 grams of gold over and above the commissions,” said Ahmed. “With each new offplan launch in Dubai, it’s increasingly difficult for developers and brokers to connect with new buyers.
“The higher commissions – and the gold – are incentives to make things happen.
“The ‘war of commissions’ is a way to drive sales and gain market share, especially in established and emerging mid-market communities.”
How are offplan sales doing?
In any given month, offplan sales still make up 65-80 per cent of overall residential property deals in Dubai. With nearly all of Dubai’s established freehold locations having less space for new launches, developers are zeroing in on areas such as Al Furjan and Dubai South, while JVC continues to have its fair share of new launches.
These days, the same areas could have multiple developers releasing their projects at the same time, with more or less similar pricing and features. Among these developers are first-timers or those who are still building their track record.
“One way for them to compete in today’s Dubai property market is to offer higher commissions,” said a broker. “They are the ones who have been pushing commissions into double-digits. And these could get higher if these developers find that their sales are not hitting targets. Either way, brokers are winning.”
Of course, there is the gold too…