25 years and counting: A realtor's secret for longevity

PWShare accurate information, says Ranjeet Chavan l Image Credit: Supplied

For Ranjeet Chavan, CEO of SPF Realty, 2016 is a milestone year. A veteran of the Dubai real estate industry, Chavan completes 25 years in realty next month and his success strategy has been simple: “Convert your clients into your brand ambassadors”.

Chavan started his career with large corporates, developing and maintaining properties for local landlords. In the 90s leasing was the only option available in the real estate market. In the years that followed freehold opened up in Dubai and Chavan moved into it. After working with the Al Ghurair Group and Dulsco, he ventured out to start SPF Realty with his partner Kalpesh Sampat.

Today, even with two and half decades of experience and more than Dh8 billion worth of projects sold, Chavan is still a bit hesitant to zero in on his biggest achievement. “For most of us, owning a house is probably the single largest investment or achievement in our lives. When I see a smile on the face of a satisfied customer, who’s been able to fulfil his dream of buying a house, the feeling is indescribable. That keeps me going even after being in the industry for 25 years.”

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“I got into this industry by default at a very early age. But, by the time I matured into a professional with some industry experience, I started to love the job. With time property became an integral part of my system. I don’t think I’ve ever thought of a career change, because I’m all about real estate.”

On the realty market
“I look at 2016 to be a stable year with no further decline in prices. Investors and buyers have largely accepted that prices have virtually bottomed out and this is reflecting in the transaction figures.

“In the last four to five weeks, we have seen a slight increase in transactions. There are some serious inquiries for big ticket portfolios that people are looking to acquire. A similar paradigm shift is seen in the individual buyers’ market as well. The market activity has gone up. However, this does not indicate that the prices will go up.

“I believe, there will be a new spend on infrastructure, as the UAE government gets ready for the Expo 2020. Traditionally, when the government infrastructure spending goes up, there is a positive impact on the country’s economy, and real estate is one of the first [sectors] to be benefited.

“Moreover, with tourism numbers increasing, I see the market in Dubai getting busier in the third and fourth quarter of this year.

“The population growth in Dubai is over 5 per cent a year and in the last four years, property supply has always been less than 5 per cent per annum. Therefore, an added pressure on the availability and supply of property will always be there.

“In the next few years, we will see a high spend on infrastructure and growth in tourism plus a new influx of business visitors because of the Expo 2020. Additionally, top companies from around the globe will be trying to set up branches and offices in the UAE, which will further drive up growth in population. The economy in Dubai is growing and in the next three to four years, we will see nothing but development. The real estate sector will definitely benefit from the overall growth.

“My recommendation to anyone looking to buy a property is to consider entering the market now as property rates are close to the cost of the development in many matured communities like Emirates Living, Dubai Marina, Business Bay and Mohammed bin Rashid city.”

New Trends
“There is a continuous increase in the number of tenants currently looking at becoming homeowners, converting their rental to an asset. This trend was always present in the market, but, currently, more people are understanding the advantages of buying a property.

“The banks have liquidity. They are lending mortgages easily up to 75 per cent of the asset value at an average mortgage rate of 3 per cent. Moreover, a real estate investment in Dubai can easily achieve an annual rental yield of 7-8per cent in any freehold community close to Shaikh Zayed Road. Yields can also go up to 10 per cent in some areas. Several tenants find property purchase appealing because the rents continue to remain high, while property prices are increasingly becoming affordable. They now understand that the rent they paid until yesterday is a dead investment. Therefore, they are now trying to use a good portion of their rent money towards the purchase of a house.

“The rent you are paying for three to five years is now allowing you to acquire a house. This trend will not only help tenants to change their rental into equity but it is also going to help the market to mature further and have a positive impact on the pricing in a three to five-year scale.”

Where are we going wrong?
“People make the mistake of determining the health of the real estate sector with the pricing. I believe, the real tool to measure the state of the property sector is the rentals. If you look at last two to four year figures, the rents have not dropped anywhere in Dubai. That is the tool I use to gauge the economic health of the real estate sector.

“Moreover, if the prices are down, and rents are not falling, this is a good enough reason for investors to buy as the yields are going up. Even for the end users, it’s a good time to buy because prices of properties are low, giving them a better opportunity to enter the market. People who understand this theory have now started to purchase new houses. Another thing people do in Dubai real estate is [they] measure it on a quarterly basis, which should not be the case. Dubai has a great infrastructure, in some cases better than most mature real estate markets, such as Mumbai, London, France, Tokyo, and New York. And price wise, Dubai property rates are one-fifth compared to Hong Kong and Singapore. However, in all these countries, nobody looks at the market on a quarterly basis but they are seen yearly. It is only in Dubai that people have the habit of looking at it quarterly. This perception has also changed a lot now from the previous two cycles and it continues to change with each passing day. When we start to look at real estate with a mid to long term view, Dubai is a place where buyers and investors cannot go wrong.”

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A winning strategy
“SPF Realty has always been against the tide. In the past one-year, our number of transactions have gone up because we believed in keeping ourselves updated and being very fair, open and transparent with our clients, while giving them information. I always tell my colleagues that you should consider yourself as a doctor of real estate because people look forward to get the right information from you. And to do that successfully, your knowledge has to be 120 per cent updated. You need to share accurate information with your clients.

“Keeping ourselves up-to-date is the only challenge we face on a regular basis, and everything else does not matter to us because we are immune to prices going up or down.

“We get impacted when transactions do not happen. Moreover, I believe that at any price, there are always buyers and sellers, and our job is to connect these two. To do this, we have to have a good amount of knowledge on how, why and where the market is heading. I think, people should look at the number of transactions taking place in the market and not judge the market as good or bad, based on price fluctuations.”

Source: Hina Navin, Special to Property WeeklyPW


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