Stock Dubai skyline city
Connections from the past and crafting new ones was how Dubai's property market recorded its 2021 bounce. Image Credit: Ahmed Ramzan/Gulf News

Real estate middlemen are the ones who say the right things and know the right people in order to take a cut. In an industry known for its lack of scruples, investors face a bewildering array of choice to pick from, and horror stories abound.

Often, it is not even obvious as to what they actually do. Despite efforts through technological innovation to cut their role out, agents play a critical role in the allocation of capital in the real estate industry. The world moves through them: without their go-between, you’re selling a house that nobody sees.

In Dubai, the role of the middleman has been regulated in an admirably rigorous fashion by RERA. However, the impact each of these people varies dramatically based on the duties they adopt. The agent usually plays a role of a private banker, marketeer, broker, advisor, market-maker and specialist all rolled into one. This is especially true of the “old school” brokers who have seen the waves of change that have washed over the industry over the last two decades.

Their differing styles - from frank and humorous to dogged perseverance, to industry explanations (sometimes laden with expletives) - play a factor in their track records that data science looks at. Yet it is not about merely achieving numbers, or “churn”, but rather about fostering relationships and easing transactional hurdles in a rapidly changing regulatory landscape and with choices that would astonish even the most seasoned professional.

Amidst this chaotic backdrop, track-records and/or digital marketing, it has been the ones who have adopted personalized approaches that have stood the test of time. And the ones that investors need to look to as they navigate a market that will witness a secular increase in interest rates for the first time since the inception of freehold.

Not sold through listings

Even as we sift through the data released by Dubai Land Department for 2021, it is obvious the most successful deals that transpired never went anywhere close to the open market at all; with private marketing - referred to in the industry as the ‘bottom drawer’ - being the preferred routes for a new set of buyers looking for anonymity and ease of closure. Navigating this intricate web of knowledge and holdings, of what the buyer is looking for as well as what the seller desires, has been an art form few have been able to keep on top of.

They were the ones who foresaw the rise of successful communities and grabbed on to them early on, both at new city centers as well as suburban neighborhoods. When the freehold boom started, people bought houses to live in, rather than make money off. But as central banks embarked on aggressive quantitative easing policies, prices rose dramatically, and even as house building surged, demand remained high.

When connections mattered

The brokerage industry fragmented broadly into two categories as a response: a) the churn model which rapidly morphed into digital marketing, and the old school personalized approach where the only skillset required was to match the needs of the buyer and seller. This implied that for this subset, personalities would dominate, but through word of mouth, rather than the traditional mass marketing approach.

Through the first boom/bust cycle and the subsequent moderation, nothing prepared the investor for the strange set of circumstances that the onset of the pandemic brought to the stage. With large parts of the market frozen, it was these middlemen who deftly navigated both the opportunistic as well as the conservative flock amidst a background that was largely ruled by panic.

Confidentiality, conservatism and cliché avoidance have been the vanguard of principles these select agents have adorned, even as there has been much talk about the newer generation who feeds off headlines. Even as digitization of human interaction has become the norm, there has been a greater emphasis on fundamental factors; a sense of decorum and etiquette combined with the ability to summon decades of deep expertise to extract deals not obvious to the market at large.

For these individuals, success has nothing to do with self-promotion. These success stories, that industry insiders know of abound in the real estate sector, but curiously remain very difficult to access in this age of “data science”, proving both the limits of data mining as well as the success of this approach.

Only a handful of names remain active from the advent of the freehold phenomena in Dubai. For existing as well as new investors looking for allocating their capital to the real estate sector, perhaps this would be a good place to start their journey.