Developers 'not fulfilling their social responsibility'

Dubai: Miscommunication and lack of transparency are the major concerns among real estate investors in Dubai, Marwan Bin Galita, chief executive of Dubai's Real Estate Regulatory Authority (Rera), said.

Developers will have to work to make the market more sustainable, he said in a wide-ranging interview on Dubai's booming real estate market, which, many analysts feel, is overheated. "They are not transparent," he said.

Galita, born in the Shindagha area of Dubai on November 27, 1972, graduated from California State University in Fresno with a BA in Surveying and Engineering. He returned to Dubai and joined the Land Department in February 1995 as a surveyor, doing field work for nearly four years.

After becoming deputy chief of the section, and later head, Galita decided it was time to do an MBA in human resources from the Advanced Technology Institute in Alexandria, Egypt.

After becoming technical director at the Land Department, he managed the surveying, IT and filing and archiving sections.

Galita was chosen as a candidate for the Shaikh Mohammad Bin Rashid Young Leadership Programme, in which he participated for two years.

He was appointed CEO of Rera in August 2007.

Gulf News spoke to Galita on the many complaints that have been flooding Dubai's property sector in recent weeks.

Gulf News: What is happening in Dubai's real estate sector right now? Why are there so many complaints?

Bin Galita: There is a lot of misunderstanding in the market, from the developers' point of view and from investors' point of view. And to tell you the truth, developers aren't being transparent with us.

We are trying to introduce something called "Stop wondering, start knowing". The real estate market is good for everyone in Dubai and the government has invested money and trust and support, but even with all our efforts at Rera, people are still wondering. They need to go through the proper channels, get all the information before doing anything.

With projects being cancelled all the time, people are concerned that certain developers have run off with their investments. What do you say to this?

There are no complaints; it is all misunderstanding. If someone comes to me saying a developer has taken money, I have to do three things: I check [if] the developer is registered with me, this is the first security check. Then I check [if] the project is approved and I check if he has a trust account.

If these three are in place, I will say relax, your money is safe in one of two places. It is either already invested in the construction of the project or it's in the trust account. There is no third place. No new project will come to Dubai without a trust account.

How many developers have registered with the Land department?

The latest number of registered developers is 608. And approximately 20-30 per cent is made up of new developers who have not yet launched anything.

Rera now have 300 projects registered and Dh1.4 billion in activated trust accounts spread over 10 banks. But there are also other accounts still under process.

So the delays in construction and project handover shouldn't be a cause for concern?

Yes, there are delays in the market, but we have to look for the reason. Delays happen all over the world, and especially here with all the projects Dubai has. It's normal. What is abnormal is to ask a question and never get an answer. This is what annoys investors. We are sending e-mails to these developers and asking questions. They don't tell us anything.

Are developers doing enough to increase investors' trust in them?

Developers are not fulfilling doing their social responsibility correctly. They are focusing on things other than their core business, especially the master developers. People have trust in Dubai and most of the developers wouldn't even exist on the world map if it weren't for Dubai. They have to take their responsibilities seriously and educate people. They just want the extra buck.

Do you think the real estate sector is stable? Many people come to Dubai to invest in real estate, reap the rewards and leave. This can't be making the sector more secure.

I want to encourage people to think of long-term investments. Some real estate agents are encouraging people to come from all over the world with one target: Come to Dubai for a month, you can make Dh100,000 and then leave. And this hurts the economy.

What is your vision for Dubai as head of Rera?

This is the only job I've had since I came back from the States. And the real estate sector is very important for Dubai's growth. I've witnessed the good and the bad, the start of Emaar, the start of Nakheel, all of them.

With the Strategic Plan 2015, the market is in place, people have so much trust in Dubai, so now is the time to regulate the market.

It would be very easy to put up lots of red tape and just say no, but Dubai's story is different. Come, be creative, consider it your haven.

I always say that home is a combination of hope and memories, and Dubai can give you both.

Watchdog: Market regulator

Dubai's Real Estate Regulatory Authority (Rera) was set up in 2007 to regulate the real estate market in Dubai.

So far, 608 developers are registered with Rera. 300 projects are approved and Dh1.4 billion is in trust accounts.

"We want Dubai's success story to be sustainable and to set an example for other cities around us," said Galita.

He said anyone who has a problem with the real estate sector can contact Rera or the Land Department and check registered developers, approved projects, trust accounts and contact details online.