A record 486 property companies and real estate brokerages that were in business in 2017 did not renew their licences for 2018, real estate portal Property Finder has revealed.
The number represents a 12 per cent decrease in registered property companies from 2017 to 2018, according to figures from Dubai Pulse – the open data platform initiative from the Smart Dubai Office.
On average, firms in the real estate industry have reduced by 8 per cent year-on-year for the past two years.
Currently, the emirate has a total of 3,680 brokerages, with the number of agents increasing by 4 per cent to 6,473 in 2018.
The report comes even as the slump in Dubai’s property market continues, with ratings agency S&P predicting earlier this week that prices in the residential market will not recover in 2019.
Lukman Hajje, group chief commercial officer at Property Finder said: “This is a sign of much-needed consolidation in the industry. Fly-by-night operators who realised that their business model is no longer viable have been weeded out.
“This is a positive for the industry and only bonafide property companies with verified credentials will continue to operate, making the market more streamlined and transparent. This is a win-win situation for both buyers, sellers and all property stakeholders.”
Real estate brokers in Dubai earned 35 per cent less commission in the first nine months of 2018 compared to the same period last year.
Figures from Dubai Land Department (DLD) showed Dhs842m ($229.23m) of commission earned in the first three quarters of the year, down from Dhs1.3bn ($353.92m) in the same period in 2017.
Lynnette Abad, director of Data and Research at Property Finder said: “Over the past few years, we have seen many signs of a maturing real estate market in Dubai and this is indeed one of them.
“We have always had an exorbitant number of agencies in this market, therefore the fact that the number of agencies is reducing is a positive sign, leaving opportunity for the more experienced and professional companies to grow.”
However, the latest report also found despite the number of companies exiting the market, the number of licenced real estate brokerages has grown by 129 per cent compared to 2008.