By Satish Kanady
DOHA: A largely unregulated market with massive presence of unprofessional players is a major contributing factor to Qatar’s unstable property sector. Despite emerging as one of the key markets that power the local economy, the country’s real estate sector is still relying on traditional valuation methods.
Property market has a key role in the economic take-off of the country. But it is important that this new-found real estate wealth is properly maintained. One of the ways in which we do this is to have effective and realistic methods of valuing real estate, Minister of Justice H E Hassan bin Abdullah Al Ghanem said here yesterday.
“Property valuations have a direct impact on the banks and insurance companies; and the state is required to set rules, standards, and conditions for the practice of real estate valuation profession, to regulate and improve the expertise and knowledge of people working within the industry,” he said while opening QIB International Conference on Real Estate Valuation.
Professional valuation of properties is completely absent in Qatar. Incompetent and unprofessional valuators are largely involved in the jobs. This is creating a lot of instability in the market and both the buyer and the seller do not know whether they paid or received the real value of transaction, Ahmad Jassim Al Jolo, Chairman, Qatar Society of Engineers, told The Peninsula.
“We do not know exactly who is authorising these people to do the job. There must be a regulatory body to control the market and competent bodies like Qatar Central Bank must authorize the valuator. The valuator and the marketer must be distinguished there should be special section for feasibility study and the valuation”.
The industry must be treated as a specialised market and should not be open to non-professional, he said.
What worries the market players is why there are no effective regulations in the key sector despite having a law in place to control the Qatari market. The existing law bars expatriate individuals from working as real estate brokers and makes it mandatory for Qatari individuals to operate as property agents. Individuals caught working as real estate brokers and offering properties on rent or for sale without proper licence could be penalised. The fact is Qatar’s property market is still largely controlled by expatriate brokers and law-breakers.
Market experts say Qatar’s property market has been mainly following the traditional valuation method for the last two decades. Total number of professional evaluators in Qatar would come something around hundred. This is a very small number, said Prof Ahmed Anis, Chairman ERA Appraisal, Egypt.
Real estate is one of the key sectors that power the region’s economy. Unfortunately, a few countries have an effective valuation system. The market is often taken to wrong directions by the non-professionals in the sector.
Prof Ahmed said the Arab region is working together to set up an “Arab Forum of Valuation”, which would bring in best practices and global standards in the region’s emerging real estate sector. The Forum will enable us to consult and network with the international evaluators. For investing in the neighbouring countries, we need to know that market. The Forum would act as a great facilitator in terms of sharing market intelligence.
Access to information about Qatar’s proposed roads and highway projects are landing property developers in trouble. Real estate companies and private individuals often end up in buying properties without knowing their property would be soon acquired for development activities. Experts want the Urban Planning Development Authority (UPDA) and the municipalities to put their proposed development plans on the public domain to avoid hassles.