Next month the Dubai Government will launch the biggest update to its valuation rules since passing new legislation in 2015. The updated ‘Emirates Book’, which is mandatory for all valuers in Dubai, now fully incorporates the latest IVS and ensures best practice is being applied in one of the most international real estate markets anywhere in the world.
Over recent decades Dubai has asserted itself as a global hub for business and investment. Next year, all eyes will be on the largest of the Emirates in the UAE as Dubai plays host to Expo 2020, the enormous international exhibition designed to showcase the achievements of a nation. And Dubai has much to shout about. Over the last three decades the UAE has seen GDP grow by more than 900% and its population by 8.6 million. In just ten years the UAE has climbed from 47th on the World Bank’s ‘Ease of Doing Business’ Index to 11th in 2018, ahead of markets such as Germany, France and Australia.
One reason for Dubai’s success has been the Government’s efforts to improve the conditions necessary to support and boost international business and investment. Acknowledging the importance of the real estate market to the domestic economy, and to the wider UAE, the government has sought to embed international standards of best practice in numerous facets of the sector, from property measurement and construction cost benchmarking to professional ethics and, now, valuation.
Mohamad Al Dah of the Dubai Land Department
“We’ve had a long history of valuation professionalism in Dubai”, says Mohamad Al Dah, Senior Director at Dubai Land Department (DLD), the part of the Government responsible for overseeing and regulating Dubai’s real estate market. “Unfortunately, it hasn’t been very well regulated until fairly recently with the passing of new laws in 2015 requiring valuers to adhere to locally published valuation standards”.
Al Dah notes that the main objective of the valuation law (Law 37/2015) has been to enhance levels of professionalism and improve market performance; “Global investors are always seeking assurance, they are looking to put their money and business in transparent markets where the information available to them is trustworthy and comparable with other countries. In the case of Dubai, we have sought to ensure that valuation data – a critical source of information in any investment decision – is exactly that, reliable and comparable. Investors into Dubai are already familiar with valuation approaches in Singapore, Hong Kong, London, New York and throughout the world, our aim has been to ensure that the standards here are robustly applied and consistent with international best practice”.
Dubai will host Expo in 2020
The Emirates Book supports valuers in Dubai by providing clear instructions on how they can work in compliance with both the Dubai local law and the International Valuation Standards. The latest version offers wholesale and mandatory updates to the earlier iteration, first published in an advisory capacity in 2011.
“It’s important that the standards in Dubai have been written in such a way as to ensure alignment with international rules whilst being compatible in the local market. We wanted something that could marry local customs with international best practice, so we have created the Emirates Book in conjunction with the International Valuation Standards Council as the recognised global standard setter. In fact, we have worked not just with the IVSC but with professionals and business leaders in Dubai, including through a six-month open consultation, to ensure broad input and ownership of the new Emirates Book” says Al Dah.
IVSC Technical Director, Alexander Aronsohn, has worked with Dubai Land Department; “The Emirates Book exemplifies international best practice and the commitment of the Dubai Government to safeguard and advance the domestic real estate market. Reassuringly, in aligning local laws and practice with international standards it was encouraging to note that there were more similarities than differences from the outset. Now that it is fully aligned with the very latest IVS, the Emirates Book positions Dubai as a world leader in valuation best practice”.
The Government is eager to highlight that the standards are there to support valuers and not to act as an impediment to their work. Al Dah comments “we want valuers in Dubai to embrace the standards and to feel empowered by them; to see them as a means of delivering confidence and certainty to their clients and to the market as a whole. The Dubai Land Department is already delivering training to support compliance and this training will be expanded and updated on a continuing basis. We are also aiming to launch training for valuers in asset classes other than real estate, and to develop courses which target the managers of valuers, focusing on the broader context like the legal aspects of valuation.”
With the standards being mandatory Al Dah recognises the challenge of monitoring compliance, but notes an innovative approach being taken by Dubai’s authorities; “Last year we launched a new mobile app which valuers can use to complete and log their reports. The app provides further benefits and will, in time, give valuers access to benchmarked data which can further enhance the reliability of their work. We know that access to current and reliable data is a challenge in most of the world’s major real estate markets and it is one area where Dubai is keen to show its leadership. It also gives Dubai Land Department the ability to log and audit valuation reports to ensure the standards are being applied.”
Indeed, Dubai’s leadership is already being seen to extend beyond the valuation profession and local market, says Al Dah; “Developing a framework which brings Dubai in line with international standards is something which other regulators in the UAE are keen to follow. Our experience is that regulating the valuation profession effectively can be quite a challenge. However, our partners across the region have been keen to learn more about the process of developing local laws which reflect international standards and work is ongoing to replicate this approach across the UAE so that the region as a whole is seen as a model for best practice.”
You can find out more about the Dubai Land Department and the new Emirates Book Standards through their website: https://www.dubailand.gov.ae/English/Pages/Default.aspx