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Whether you are buying or selling real estate as an individual, pro-viding a loan in the form of debt finance (mortgage) as a financial institution against real estate, or a corporate entity having real estate assets shown on your balance sheet, it is essential to have access to accurate information and independent professional advice to make informed decisions.
Professional advice is critical in navigating today’s complex markets and choosing a professional service provider that you trust to help you make key decisions is important in your financial planning. When considering property valuation, you need to engage a valuation firm that is registered with the Royal Institution of Chartered Surveyors (Rics), a global professional body that provides regulation and mandatory standards for surveyors practising as property valuers.
A chartered surveyor is among the most highly qualified and regulated property professionals within the real estate industry, adhering to the highest standards and best practice guidelines. Since March 31, 2014, any Rics member undertaking a real estate valuation in the UAE must be enrolled on the Valuer Registration Scheme (VRS). The UAE is the first country in the Middle East to introduce the valuer registration scheme. The aim is to provide high-quality, professional valuation, which is in everyone’s best interest.
Investors start chasing value in Dubai realty
The Real Estate Regulatory Agency also introduced this year new rules to further enhance and professionalise the valuation profession. From August, all surveyors providing valuations in Dubai have to be certified as valuers by taking a training course, passing an exam and paying an annual fee. A similar framework for valuer registration/certification is being introduced in Abu Dhabi by the Department of Municipal Affairs, under Law 3 of 2015, which will help better regulate the profession.
In the current economic climate, banks are taking a more selective approach to lending and rely more on detailed professional reports. Auditors require justifiable valuations of a company’s real estate assets for balance sheet reporting and good corporate governance. Knight Frank has witnessed an increase in enquiries from all sectors of the market, particularly from financial institutions, looking to receive accurate, internationally recognised valuations of their assets.
The UAE is an emerging and slowly maturing real estate market that has witnessed its own boom-and-bust cycle. There has been huge inward investment in the last five years and the country is growing as an increasingly important trade and logistics hub and tourist destination.
The market here is opaque; information is not openly shared and institutional investment is relatively rare due to land ownership structure, short-term leases and lack of planning controls. This is slowly changing as professions are regulated and laws are implemented to bring wider investor confidence.
Legalities in the UAE real estate market
The UAE has ambitious plans for growth and expansion with a number of large development projects in the pipeline. Accurate property valuations are critical in providing confidence to local and international investors, as these valuations are required to support their investment decisions and financing.
Source: Stephen Flanagan, Special to Property Weekly