Dubai’s RERA (Real Estate Regulatory Authority) has taken stringent measures against misleading online property ads, and which marks a significant shift for the city's real estate landscape.
The new RERA policy is expected to create a drastic reduction of up to 40 per cent in property sales ads on the various real estate portals. This move specifically targets the misuse of developers' No Objection Certificates by agents to mass-advertise individual units, a practice that has contributed to a clutter of listings on digital platforms.
The introduction of the digital form A - the official advertising permit for rental properties - is poised to eliminate 50 per cent of property rental ads currently online. This enforcement is part of RERA's broader strategy to ensure transparency and authenticity in listings, thereby streamlining the decision-making process for buyers, sellers, and tenants.
The anticipated decrease in property ads is expected to have several immediate effects.
- Firstly, with fewer listings, stakeholders can make more informed decisions without the confusion of distinguishing between genuine and fraudulent ads.
- Secondly, the scarcity of properties listed could lead to quicker transaction times, potentially driving prices up as demand outpaces supply.
RERA's stance is clear: every online property ad must accurately represent the real estate it promotes, including specifications and pricing. This approach not only aims to protect consumers but also to foster a healthier, more transparent market environment.
Despite stringent regulations, real estate agents and property portals often had a creative interpretation of RERA's advertising guidelines. This situation, although beneficial for the real estate portals' revenue streams, involves a complex interplay of responsibilities among all market participants.
It's essential to recognize the collective role in this context, rather than attributing blame to any single party - or denying any involvement in the issue of less accurate online property ads.
The consequences of permitting a multitude of less reliable property listings are varied and significant:
- Reputation challenges for some portals due to listings that are not available or inaccurately presented. A distorted perception of market supply, with an apparent abundance of properties for sale or rent, that does not accurately reflect compliance with RERA regulations.
- Discrepancies for developers who discover their properties listed at prices not aligned with their actual valuations.
- Diminished returns for real estate companies whose legitimate listings compete with a multitude of other listings, some of which may not adhere to the required standards.
- Investors looking to sell or lease properties face increased competition from listings that may undercut or overshadow their offerings.
- Real estate agents who follow the guidelines set by RERA and Dubai Land Department diligently, find themselves at a disadvantage compared to those who might not adhere as strictly to these standards.
- The accuracy of market statistics and performance indicators is compromised, being unable to accurately reflect the true absorption rate of listed units.
- Identifying genuine market trends, such as absorption rate (number of advertised vs number of sold/transacted properties, or the time it takes for an advertised property to sell) becomes challenging. A significant portion of the listings might not represent unique or accurately priced properties.
The Dubai property market, rich with opportunity, deserves our utmost effort and dedication to ensure it remains a trustworthy and vibrant landscape for all, now and in the future.
Firas Al Msaddi
The writer is CEO of fam Properties.
