ARELLO News Archive

Dubai spurs regional standardisation of real estate appraisal

The Emirate is driving the adoption of a common real-estate valuation regime.

By Nicole Walter, Senior Reporter

Dubai: Dubai is nudging the Arab region towards a common standardised valuation regime as its real-estate appraisal centre, Taqyeem, gains regulatory approval.

"The Arab Appraisal Foundation has been formed. By November we'll hold the first conference to look at regulations," said Marwan Bin Galita, CEO of the Real Estate Regulatory Agency (Rera).

The Arab Appraisal Foundation (AAF), whose constitution was recently approved, takes in the wider Middle East. Dubai's Land Department and the Arab Administrative Development Organisation led the impetus to introduce uniform standards and practices.

A mixture of global valuation standards, including the UK's Royal Institution of Chartered Surveyors (Rics), are in the mix.

Rics works closely with Taqyeem, which is adopting the International Valuation Standards Council (IVCS) practices everyone accepts as the ultimate standard umbrella.

Taqyeem will bring out the Emirates Book, its response to the Rics Red Book, a guideline for ethical valuations.

The Emirates version, based on the IVCS, will provide full reports, regulations, rent valuations and auditing methods and is still a work in progress, according to Mohammad Khodr Al Dah, head of Taqyeem.

Full house

He was addressing a full house at the Land Department's first workshop on valuation held in Dubai last week.

Bin Galita announced: "I just got the news that the government has approved the appraisal centre regulations register for valuation professionals.

"This is important, a [Department of Economic Development] trade licence used to be enough, but now with the new regulations the sector will become more professional and we'll raise the level of transparency in appraisals," he added.

Raising that transparency helps achieve more accurate valuation results and with that, investment decisions.

"Finding comparables is difficult, there is little transparency in the market and buyers and owners make different assumptions," said Noura Yassin, head of Valuations at CB Richard Ellis, a research and consultancy firm.

Taqyeem is happy to open its doors wider. Until now, Bin Galita explained, the Land Department's valuation committee worked behind closed doors.

"We'll share our methodologies and data with valuation professionals and publish our approved appraisal numbers," he said.

At present Taqyeem provides valuation certificates to private and government customers carrying out mainly comparative and residual property surveys on request. A lot of them involve properties on the Land Department's freehold register.

In-depth

"We're providing a lot of certificates. Work has gone up these days as there are a lot of disputes in court. We're looking at providing more in-depth valuation reports, rather than just certificates, in the future," said Al Dah.

The legal framework may have been approved but regulations still need to come into full force. Al Dah reckoned it could take up to a year or so until everyone has adopted them and private valuation professionals are fully registered.

"Once they are, we'll stop offering services to the private sector, leaving it to the accredited valuers. We'll only do government valuations."

Taqyeem requires registered valuers to take part in continuing professional development. Bin Galita said no one could become a practitioner, including Emirati professionals, without meeting Taqyeem's — and Rics — standards.

"We would like to see Emiratis trained in the Rics programme and see some Emirati professional chartered surveyors on the Rics board as well," said Ron Hinchey, partner, Cluttons Middle East, also a member of Rics.

The Middle East has over 2,000 Rics practitioners at present and Luay Al Khatib, special adviser to the Rics president, said it was all about collaboration and integration with national and regional authorities, such as Rera, all setting their own standards as well.

Bin Galita hopes that a uniform standard could soon be in place for the UAE, with Abu Dhabi having shown interest in this.