Experts warn new Dubai statistics law could affect transparency, property sector

The new law forbids private companies from 'conducting any survey[s] without obtaining authorisation from the Dubai Statistics Center'.

Concerns have been raised over the new Dubai statistics law. Sarah Dea / The National

A new law that demands companies seek government approval before carrying out surveys in Dubai could damage the property sector and discourage research in the emirate, experts have warned.

The Dubai government announced a law late last month intended to help enable the Dubai Statistics Center “to establish an advanced statistics system”, according to a statement. But experts zoomed in on a provision in the new law that forbids private companies from “conducting any survey[s] without obtaining authorisation from the Dubai Statistics Center”.

The provisions “would strongly disincentivise many public and private sector organisations from conducting research, due to the additional time and bureaucracy that may be involved,” said Radhika Punshi, Dubai-based director of consulting at The Talent Enterprise, which studies Arabian Gulf labour markets.

The pre-approval requirement would be likely to undermine the credibility of any research done in Dubai, Ms Punshi said. People “may come to view government-sanctioned research with a pinch of salt”, she added.

“If Dubai wants to act on its vision of becoming an innovative, knowledge-based economy, then greater transparency, objectivity and openness to differing viewpoints in areas like education and human capital are crucial,” she said.

Not all research providers see the centralisation of statistics gathering as negative.

“Overall the announcement is very positive for companies like us which do provide reliable and professional data and information services, as there are lots of false and misdirecting information regarding real estate from companies who do have conflicted interests,” said Ahmet Kayhan, the chief executive of Reidin, a real estate information company. “We already work with lots of government agencies and will apply for a permission from Statistics Center as soon as possible.”

However, Coralie Pring, research coordinator for corruption surveys at Transparency International, which last December ranked the UAE as the most transparent Arab nation, said that the law’s provisions were likely to make it harder for the organisation to do research in the country.

“It may well happen that once prior approval is needed for research in Dubai, and if the topic is of a sensitive nature, the government may refuse to let surveys take place, in case it exposes results that may embarrass them,” Ms Pring said.

“Private survey firms may refuse to even consider running such surveys,” she said.

The property industry relies heavily on data provided by the private sector to determine capital values, rents and underlying demand.

Craig Plumb, head of research at the real estate firm JLL, which publishes quarterly reports on the Dubai real estate market, said that “any reduction in transparency in the Dubai property market is a bad thing, and is likely to put off foreign investors from investing”.

Mr Plumb said: “If we become caught up in a more bureaucratic process, where it takes longer to publish our findings, then these delays could be damaging to the property market.”

Professor Joseph Kadane, chair of the American Statistical Association’s committee on scientific freedom, which produces reports for the United Nations on best practice in government statistics, warned that the new law would likely lead to the spread of “uninformed rumours and uncertainty about the extent of the downturn” in Dubai’s property market.

“This will do far more harm to Dubai’s economy than allowing private surveys to be conducted and published,” Mr Kadane said. “International investors, in particular, are sensitive to the quality of the information available to them in deciding where to invest.”

This is not the first time statistics have been in the news recently. The Damac Properties managing director Ziad El Chaar in October accused Dubai’s property brokerages of “professional malpractice” after they released estimates indicating that the Dubai real estate market was likely to be oversupplied with houses in 2016 – at a time when rents and prices were likely to fall. Instead, Mr El Chaar said he was confident that there was “a sustainable level of development across the city”.

Mr El Chaar blamed the brokerages for having a “detrimental effect on the generally positive sentiment in the market” and running the risk of “turning people away from what remains a strong and well-regulated marketplace”.

In August, the Dubai Land Department said that it would no longer provide quarterly updates to its Rera rent index, which is used as the basis for negotiating rent prices in the emirate. Analysts said that the change would lead to tenants paying higher rents.

Neither the Dubai Statistics Center nor the Government of Dubai media office responded to requests for comment.