This article was originally published in propertyfinder Trends Report 2017 – click here to read online (Adobe Flash required) or click here to download PDF instead. To request a printed Report, please email us on email@example.com
Developers have been ramping up launches of their off-plan projects in the last six months with no stop in sight.
Even real estate agencies working almost entirely on off-plan projects have raised concerns that there is an overload of new project launches. Developers are locking in the money, but in the long run, the situation may turn on its head as increasing supply may outstrip demand, and lead to a lull in interest or a slump in pricing trends.
Currently, customers are starting to get bombarded with 25-50 emails and messages per week from different real estate agencies and developers advertising property launches multiple times.
With a nod to the pearls of wisdom from the secondary market, where an owner can engage only three companies, developers should be required to use no more than five to seven agencies per project, and then rotate the agencies for the next project.
Another resolution would be that developers should not have access to more than 20 projects at a time; and then more projects can be approved, once the first three to five are delivered.
This could contribute to a more robust formula for demand and supply, and a more stable investment scenario for all stakeholders.
One of the latest trends in the market is real estate agencies buying domain names for every project launch with some connection to the name of the project. On average, we see ten new websites or microsites springing up for every launch. This may be unethical because these websites are created to confuse the consumer into believing these are official communications from the developer, which is not only risky for the developer’s brand but can also create questions regarding credibility of information. A solution could be invoked by RERA, which can draw strict guidelines for such activities.
It is difficult to caution restraint as Dubai Expo2020 edges nearer, but introducing authoritative rules will help the real estate market mature in the right direction and ultimately strengthen the economy.
COO, SPF Realty