As much as UAE residents love their life in the Emirates, they also enjoy complaining. Trawl any social media platform and you will find numerous complaints about bad real estate brokers. But are they really any worse than other professionals in the country? Here are a few reasons why brokers get such a bad rep:
How fees are paid
In most parts of the world, brokers help landlords rent out or sell their property. This means landlords pay brokers for this service, but in the UAE tenants tend to pay. Historically, there was a small pool of ultra-wealthy landlords that did not want to pay agents to bring them clients; in fact many tenants went straight to the building they wanted. If you have tenants paying agency fees, this affects how landlords choose which broker to work with. If you’re not paying for the service, then why care about the quality of who you use?
Lack of exclusivity
Landlords in the UAE often avoid giving brokers exclusivity on marketing their properties - something that allows sub-standard agents to find work. If a landlord exclusively works with a single broker, they tend to pick what they consider the best one. If they don’t, then any broker who cold calls them can get involved. They believe the more brokers market their property, the higher the more chance of having it rented or sold. However, this can lead to agents not spending much time on any particular unit. Consider the number of times tenants are told to 'just go to the building and the unit is open'. Ten agents may be working on the same unit but only one has a chance of closing the deal - so, it's likely the majority will not spare the time to do a viewing.
The UAE is a transitory place where many do not own their own homes. Many residents will only interact with one or two brokers during their stay here. In other parts of the world, you can find agents that have been in business for 30 years; everyone in their city knows them. This is not the case in Dubai or Abu Dhabi where turnover is high. New people to the country have no clue who is good or bad. My advice: ask for a referral from friends or colleagues before hitting the internet.
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Read more:
Why the obsession with real estate in the UAE?
Pros and cons of buying real estate in the UAE
Should buyers invest in off-plan or ready built in the UAE?
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Regulations
The UAE is a young country, therefore its regulations are continuously evolving. However, the Real Estate Regulatory Agency exam is pretty taxing and Abu Dhabi has tests to pass now too, but these do not approach the difficulty and length of qualifications in other, older, real estate markets. This again is part of the transitory nature of the Emirates: if you are in your home country and looking to be a real estate agentthen investing time and money in studying and passing exams is well worthwhile. If you are only going to be in the Emirates for a few years then it is less valuable to truly understand the laws and market here.
High turnover
The high turnover we see among residents also applies to real estate agents. I have lost track of the great staff that have left because they were a “trailing spouse” (male and female) and their partner moved on to another opportunity. This results in an endless stream of “rookies” who take a long time to learn the ropes, annoying many clients in the process. The short lifespans of UAE brokers also means little is invested in training. Companies in the real estate industry need to invest more in training their staff which will in turn will improve the standards of customer service and the knowledge base of agents.
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Read more:
Traps to avoid when buying property in the UAE
How buying a home in the UAE can halve your rent
Why property is a good investment if you take out a mortgage
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Customer service
An understanding of good customer service and business conduct differ wildly across the globe. I had a meeting last month with an eastern European, an Emirati, an Arab national and an Indian national and the attendees arrived in dribs and drabs with some up to 30 minutes late. I will not tell you who arrived when, but everyone felt they were on time. Equally customer service varies between continents, so while the broker may feel they are offering great customer service, the client may disagree.
Hiring costs are low
Real estate brokers are cheap to employ. If real estate agencies are only paying their staff commission, then they only have the visa and insurance costs to pay. If employees cost little to take on, then their employers do not take the time to select them carefully or train them. Some firms in the UAE go through hundreds of brokers a year, spending little or no time or money on their career progress.
Brokers are not well paid
Contrary to popular belief, most estate agents are not making huge amounts of money. Yes, some of the great ones are earning well, but most do not earn enough to be the main breadwinner supporting a family. This means the industry either attracts young single employees with low overheads, the less well educated or “trailing spouses” whose partner makes the primary income.
While some brokers flout regulations, deliberately mislead clients and are just generally dreadful at their jobs, others have great potential. If I had three wishes: landlords would pay real estate agents instead of tenants; regulators would take a pro-active approach in going after illegal brokers and clients would seek a referral for a good broker as opposed to clicking on pretty pictures or the lowest prices. Good performance needs to be rewarded.
Ben Crompton is the managing director of Crompton Partners Estate Agents
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Country-size land deals
US interest in purchasing territory is not as outlandish as it sounds. Here's a look at some big land transactions between nations:
Louisiana Purchase
If Donald Trump is one who aims to broker "a deal of the century", then this was the "deal of the 19th Century". In 1803, the US nearly doubled in size when it bought 2,140,000 square kilometres from France for $15 million.
Florida Purchase Treaty
The US courted Spain for Florida for years. Spain eventually realised its burden in holding on to the territory and in 1819 effectively ceded it to America in a wider border treaty.
Alaska purchase
America's spending spree continued in 1867 when it acquired 1,518,800 km2 of Alaskan land from Russia for $7.2m. Critics panned the government for buying "useless land".
The Philippines
At the end of the Spanish-American War, a provision in the 1898 Treaty of Paris saw Spain surrender the Philippines for a payment of $20 million.
US Virgin Islands
It's not like a US president has never reached a deal with Denmark before. In 1917 the US purchased the Danish West Indies for $25m and renamed them the US Virgin Islands.
Gwadar
The most recent sovereign land purchase was in 1958 when Pakistan bought the southwestern port of Gwadar from Oman for 5.5bn Pakistan rupees.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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UAE Team Emirates
Valerio Conti (ITA)
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Quick pearls of wisdom
Focus on gratitude: And do so deeply, he says. “Think of one to three things a day that you’re grateful for. It needs to be specific, too, don’t just say ‘air.’ Really think about it. If you’re grateful for, say, what your parents have done for you, that will motivate you to do more for the world.”
Know how to fight: Shetty married his wife, Radhi, three years ago (he met her in a meditation class before he went off and became a monk). He says they’ve had to learn to respect each other’s “fighting styles” – he’s a talk it-out-immediately person, while she needs space to think. “When you’re having an argument, remember, it’s not you against each other. It’s both of you against the problem. When you win, they lose. If you’re on a team you have to win together.”
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
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Fighter profiles
Gabrieli Pessanha (Brazil)
Reigning Abu Dhabi World Pro champion in the 95kg division, virtually unbeatable in her weight class. Known for her pressure game but also dangerous with her back on the mat.
Nathiely de Jesus, 23, (Brazil)
Two-time World Pro champion renowned for her aggressive game. She is tall and most feared by her opponents for both her triangles and arm-bar attacks.
Thamara Ferreira, 24, (Brazil)
Since her brown belt days, Ferreira has been dominating the 70kg, in both the World Pro and the Grand Slams. With a very aggressive game.
Samantha Cook, 32, (Britain)
One of the biggest talents coming out of Europe in recent times. She is known for a highly technical game and bringing her A game to the table as always.
Kendall Reusing, 22, (USA)
Another young gun ready to explode in the big leagues. The Californian resident is a powerhouse in the -95kg division. Her duels with Pessanha have been highlights in the Grand Slams.
Martina Gramenius, 32, (Sweden)
Already a two-time Grand Slam champion in the current season. Gramenius won golds in the 70kg, in both in Moscow and Tokyo, to earn a spot in the inaugural Queen of Mats.
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Day 5, Abu Dhabi Test: At a glance
Moment of the day When Dilruwan Perera dismissed Yasir Shah to end Pakistan’s limp resistance, the Sri Lankans charged around the field with the fevered delirium of a side not used to winning. Trouble was, they had not. The delivery was deemed a no ball. Sri Lanka had a nervy wait, but it was merely a stay of execution for the beleaguered hosts.
Stat of the day – 5 Pakistan have lost all 10 wickets on the fifth day of a Test five times since the start of 2016. It is an alarming departure for a side who had apparently erased regular collapses from their resume. “The only thing I can say, it’s not a mitigating excuse at all, but that’s a young batting line up, obviously trying to find their way,” said Mickey Arthur, Pakistan’s coach.
The verdict Test matches in the UAE are known for speeding up on the last two days, but this was extreme. The first two innings of this Test took 11 sessions to complete. The remaining two were done in less than four. The nature of Pakistan’s capitulation at the end showed just how difficult the transition is going to be in the post Misbah-ul-Haq era.
