Dubai real estate has moved past severe cyclicality, says fäm Properties CEO

Property prices in Dubai have been on a tear over the last 24 months as the emirate’s global appeal and economy have bounced back strongly in a post-Covid environment.

And the data around Dubai’s real estate market speak to this story. For example, the Dubai Land Department (DLD) marked its strongest performance ever in 2023 with 1.6 million transactions (from real estate transactions to rental agreements), with 166,000 real estate deals worth Dhs634bn. This represented a growth of 16.9 per cent compared to 2022, which accounted for approximately 1.368 million transactions.

Data from the likes of CBRE further point to how average property sale prices in Dubai also increased by 20.1 per cent in the year to December 2023.

Demand for property has been red-hot and companies like fäm Properties have benefitted from this upswing.

However, Firas Al Msaddi, the founder and CEO of fäm Properties, has experienced several ups and downs in the market, including the 2009 crisis and Covid-19. Since launching the business with his brother and co-founder in 2009, fäm Properties has gone on to become the largest real estate brokerage company in Dubai with a sales force of 650 real estate agents.

And in an extensive interview with Gulf Business, Al-Msaddi explains why he thinks that Dubai’s real estate sector has “moved past severe cyclicality”. He also gives some insight into where he sees the future prospects of the market, especially in terms of the large stock of off-plan units in Dubai. You can watch the full interview below and read the transcript as well.

Gareth van Zyl: It’s a pleasure to have with me today Firas Al Msaddi, who is the founder and Chief Executive Officer of fäm Properties, on the podcast. Firas, thank you so much for joining us.

Firas Al Msaddi: Thank you

Gareth van Zyl: Can you tell me about what fäm Properties does exactly?

Firas Al Msaddi: fäm Properties is essentially a brokerage company and actually the largest brokerage company ever built in Dubai. We have 26 branches, from Dubai Creek Harbor all the way to other parts of Dubai. We boast the largest sales force with about 650 real estate agents, and our plan is to expand to 1,500 agents by the end of next year. Additionally, we are the most technologically advanced real estate company in the region. We developed DXB Interact, a platform that brings unprecedented transparency to the market. It shows all transaction histories for rent and sales, allowing anyone to find out how much any property in Dubai was sold or rented for. We’re very proud of this innovation because it has significantly changed the way real estate agents conduct their business in this market.

Gareth van Zyl: I’m really interested in your backstory and how you started this business. Obviously, you came to Dubai with big dreams, right?

Firas Al Msaddi: Yes, I moved to Dubai on December 15, 2005. I had an interview from Syria with a fashion retail company in Dubai, and I got hired. I worked for about a year and a half in a retail shop, selling clothes. Then, during a 25-day vacation, I tried my hand at real estate because it was commission-based. I couldn’t just drop my salary, which was Dhs5,500 back then, and jump straight into a commission-based job in an industry that was completely new to me.

During those 25 days, I liked what I experienced. I remember stepping into the office and seeing people wearing fancy clothes, driving nice cars, and conducting business. So I thought if they could do it, I could too, and take it to the next level. I went back, resigned from my job, and joined the real estate industry. After about a year, I started fäm Properties in 2009, which was not just the peak of the financial crisis but also the peak of the real estate crisis, as the bubble had burst in the US and affected the entire world. Fast forward to today, and we’re the largest real estate company in the region.

Gareth van Zyl: Before we get into the financial crisis, I’d like to know what it is about real estate that excites you. What gets you up in the morning and keeps you going?

Firas Al Msaddi: When I was working in the fashion shop, I wanted to be in a leveraged industry. I had many interviews, some with real estate companies and others with insurance companies. Real estate stood out to me because, back then, two-thirds of the world’s cranes were in Dubai. The architectural design of the city was astonishing to me, coming from Homs, Syria.

Real estate also appealed to me because it’s an industry driven by experience and networks. Unlike manufacturing or trading, where you need to invest a lot to make more, in real estate, your success is based on your experience and connections. The more experience you have, the higher value properties you can sell, and the more you can sell, the more you can earn. This dynamic aspect of the industry is what excites me and keeps me motivated.

Gareth van Zyl: Let’s go back to the 2009 period, a time when everything in Dubai was changing dramatically. What was going through your head when you had just started your business, and suddenly, the world around it was shifting?

Firas Al Msaddi: I always take calculated risks, never a risk I can’t afford. Looking back, it didn’t seem like a risky move at the time. I had the mindset that if there was even one sales transaction happening in Dubai, I could succeed. With all the inventory—these towers and skyscrapers—I thought my job could be to help investors exit the market, and in doing so, I could create success and build wealth.

Many people were overly cautious and lost objectivity, becoming too emotional about what was happening. I remember seeing people abandoning their cars and dragging suitcases as they left the city. Despite the chaos, I saw an opportunity. I rented an office space with a three-year lease, and the interior design company questioned my sanity, asking if I was sure about my decision since everyone else was leaving. But to me, it was clear: every single square foot in Dubai was meant to be sold or rented, and someone had to facilitate those transactions.

Gareth van Zyl: What did you do that was different from anyone else in the market? You’ve built this incredible business, now the number one agency. How did you actually go about doing it?

Firas Al Msaddi: At some point, I realised that even if you open a small shop in Dubai and run it for three or four years, it becomes a business of value; it becomes an asset you can sell. However, real estate companies need to scale significantly to have true value. A company with 40-50 agents isn’t worth much because if the agents leave, the company has no value.

I decided to take the company to a very corporate level where it would be valuable and large enough for everyone involved to prosper. That was the trigger for the idea of scaling. I also leveraged a lot on my brother’s expertise in technology—he’s the tech guru behind all the tech in the company.

What I did differently was recognising an opportunity and taking action. Perhaps others saw the same opportunity but didn’t act on it. Even those who did start taking actions often quit along the way. I had the perseverance and commitment to see it through to the end.

Gareth van Zyl: It’s interesting that you mentioned your brother heads up the technology side. I’m keen to learn more about that and some of the IP you guys have developed, which has helped you reach this point.

Firas Al Msaddi: Yes, absolutely. When I mentioned that we are the most technologically advanced real estate company in Dubai, it’s our tech that has enabled us to scale. To grow, you need strong governance and processes, but you also need significant digitalization and automation. Managing 26 different branches in various locations requires a top-notch ERP system, CRM, and SRM. We’ve built everything on an Oracle-based platform, which has enabled our scalability.

Additionally, my brother is the founder of DXB Interact. This platform is a massive testament to our tech capabilities. DXB Interact allows everyone to see how much any property was sold or rented for in Dubai. It lets users study supply, demand, demographics—essentially everything. Because of our in-depth knowledge of real estate, we understand what information investors, buyers, sellers, tenants, developers, and property evaluators need to make well-informed decisions.

Of course, none of this would have been possible without the direction from the Dubai government and the Dubai Land Department. Their commitment to attracting foreign investment and the open data initiative by RERA was a significant trigger for us to start. It was a long and challenging journey. Initially, no one believed in the power of data. Real estate agents were concerned that if we made data open, it would hurt their sales. They feared transparency, thinking that if buyers knew the truth, they wouldn’t buy from them.

However, we saw an opportunity to introduce more transparency to the market. In my role focused on business development, I believe the greatest successes come from those who can understand and interpret data. Even with data available to everyone, you still need experts to read, interpret, and correlate it positively with what’s happening in the market. We saw a great opportunity in this, and while it wasn’t easy, today it has become the trend and the norm in the market.

Gareth van Zyl: In many respects, you were leading the charge in terms of that transparency movement. Today, there’s great pressure on property providers and real estate agents to provide that data, isn’t there?

Firas Al Msaddi: Absolutely, 100 per cent. I remember when data was limited to just one or two companies and was available only by subscription to real estate agents. These companies would advise agents to selectively choose the lowest transaction prices when dealing with sellers to convince them to sell below market value. This approach went against our company’s value system. That was the moment my brother and I decided to create our own platform. We collaborated with Dubai Pulse and the government, using publicly shared data to build it up.

Gareth van Zyl: Can you tell me more about some of your interactions with the government? I believe you’ve worked with the Dubai Land Department extensively. How have you actively helped them create a better market for everybody?

Firas Al Msaddi: The success you see in the market is a result of our collaboration with the government. Across different industries, the Dubai government listens to the private sector rather than competing with it. They have their own directions to elevate the city, and there’s a great opportunity for every company to ride on the giant shoulders of the government and take their business to the next level.

The biggest collaboration between us and the Dubai Land Department is the DXB Interact platform. We also worked with them extensively on the regulatory side, particularly on advertising permits. Historically, if you went online to real estate portals, you’d find that about 80 per cent of the listed properties were not available, had incorrect prices, or were fake ads. Governance was not strict enough.

I was often the only one in the market taking my business concerns directly to the Land Department with my brother, addressing these issues. We’re very proud of what the government and the Land Department have achieved. They took our concerns seriously, verified them, did their own homework, and realised these changes were in the best interest of the market. The market has come a long way since we started this collaboration. Now, about 50 per cent of the online listings that were previously misleading are gone, leaving only genuine listings. It’s a continuous process, and we are working closely with the Land Department to ensure ongoing improvements.

Gareth van Zyl: I’m curious to know your thoughts on how these changes will impact the market. The government’s swift implementation is admirable. How do you think this will play out in the coming weeks or months?

Firas Al Msaddi: I think the impact will be massive for every stakeholder. For example, if you’re talking about property sellers, demand and supply are crucial. Previously, there was a lot of fake supply online, which was detrimental to property sellers. Real estate agents were marketing properties at incorrect or underpriced rates just to attract leads. When buyers called, agents would say the property was no longer available and offer something else. The game was about who could post the lowest price, regardless of availability, to attract leads.

For real estate portals, while they tried to maintain genuine listings, every new ad was a financial benefit because they charged for listings. So, an agent could list thousands of properties without proper contracts, which wasn’t necessarily bad for the portals financially.

Now, with the new regulations, the supply side is more transparent and accurate. As a seller, when you check property prices online, you can trust those prices are real. As a buyer, you won’t waste time and your decision-making process will be much faster. If a property is listed for 2 million, it means it’s actually available for that price. You won’t have to call numerous agents to find a genuine listing.

For real estate brokers, the entry barrier is now higher. Previously, any new agent could list properties without proper contracts. Now, agents need to do their job properly and have genuine listings. This ensures that only professional and serious agents remain in the market.

For developers, this change is also positive because it eliminates fake competition. From a data and statistics standpoint, we can now measure many important parameters that we couldn’t before. For instance, we can measure the absorption rate—how many properties are advertised and how many are sold within three months. This is a critical indicator that we couldn’t verify before. Overall, we can now read market trends more accurately with genuine property listings, which was previously impossible.

Gareth van Zyl: Given your access and insight into the data, what are you seeing in the property market right now? The market has been red hot in Dubai for the last 24 months or so, with prices up over 20 per cent in many places last year. What do you think will happen next, especially from your perspective, having seen it all?

Firas Al Msaddi: I don’t have a crystal ball, but based on my reading of market fundamentals and historical data, I believe Dubai has moved past any severe cyclicality. Dubai’s global positioning is more cemented now than ever before. The city has proven its long-term ability to continuously attract new residents and foreign investors. Additionally, Dubai has shown a high level of agility in turning challenges into opportunities. For instance, after the recent storm and flooding, the government quickly allocated 80 billion dirhams for a new sewer system, and work started within weeks.

Events like Expo 2020 showcased what Dubai has to offer, and various government initiatives over the past decade are now bearing fruit. Dubai’s quality of life stands out globally. Having travelled extensively, I see the gap between the quality of life here and elsewhere.

Regarding the property market, I have some concerns about the oversupply of off-plan properties, which is extremely hot right now. However, many newcomers are moving to the city. On a macroeconomic level, inflation is a significant issue worldwide, and there doesn’t seem to be a straightforward solution. To protect the value of your wealth, investing in an asset class like real estate is essential. Real estate is one of the easiest asset classes to understand because everyone is either a tenant or a landlord.

Investing in an off-plan property in Dubai allows you to lock in today’s market value for a property that will be delivered in two to three years. This strategy is an excellent hedge against inflation. Consider how much your money could buy today versus last year or the year before; prices are skyrocketing everywhere, from groceries to construction materials.

While I have some worries about the oversupply of off-plan properties, as long as we see the traffic on Dubai’s roads and a healthy demand, I believe the market is sustainable. The demand is very healthy, and I think it will continue to be so.

Gareth van Zyl: So just on that point, are you seeing healthy demand for the off-plan units coming online, or is there still a gap in demand?

Firas Al Msaddi: The demand for off-plan properties in Dubai has never really stopped. It’s always been strong, and it’s very easy to sell off-plan units here. However, the concern arises when there’s a significant price gap between off-plan property prices and resale prices. This gap can be problematic because it’s almost a 50/50 scenario in Dubai—sometimes buying an off-plan property leads to profit upon handover, but other times, the property is priced higher than a comparable ready property at the time of purchase.

This price discrepancy often stems from heavy marketing and developers prioritising immediate sales over long-term investor relationships. Some developers set prices as high as possible and offer higher commissions to real estate agents, who then push these properties. In my 17 years in the industry, I’ve avoided certain developers because I know that if I sold their overpriced properties, the investors would never return.

There’s a human element to this—families investing their life savings into a property. Selling them something overpriced can destroy their financial security, which is why integrity is crucial in this business.

Investors need to do their homework. That’s one reason I wrote my book: to expose both the good and bad aspects of the real estate market. This knowledge isn’t limited to Dubai; it applies globally. Some developers target new buyers without caring about future referrals or repeat business, while others focus on long-term relationships and maintaining a good reputation.

Ultimately, investors must understand what they’re investing in, who they’re buying from, and who they’re dealing with. Responsible due diligence is key to making informed and safe investment decisions.

Gareth van Zyl: I’m also interested in talking about your book, ‘The Art of Real Estate: from Entry to Exit’. What motivated you to write it? Writing a book takes quite a lot of discipline. What was the key driver for you to put out a book on this particular topic?

Firas Al Msaddi: The motivation behind the book was really about giving back to Dubai. I feel I owe this city a lot. I came here with nothing and built generational wealth. Dubai is a land of opportunities, and I believe every stakeholder owes something to this place. It’s the same reason we developed the DXB Interact platform and why I work closely with the authorities to improve regulatory frameworks.

The first chapter of the book briefly covers my personal journey, but the rest is focused on best practices, the dos and don’ts of real estate investment, and what to avoid. Although it is centred on the Dubai market, the principles can apply to any real estate market worldwide. The book offers a methodical process to follow for real estate investment, whether you’re an old-school investor, an institutional investor, or a sophisticated investor. It’s written in a simplified and practical manner, making it accessible and useful for anyone interested in real estate.

Gareth van Zyl: I love the metaphor of the journey you’ve taken and how you guide investors through their journey with your book. As we approach the end of our discussion, it’s been fascinating. Thank you. I just wanted to ask, what’s next for fäm Properties? What’s your vision for the next five to ten years?

Firas Al Msaddi: Scaling is definitely at the heart of our vision. We still have a lot of market share to capture in Dubai, but we’re also looking at opportunities in Saudi Arabia and Abu Dhabi. Not necessarily just in brokerage, but within the broader real estate space.

fäm Properties is our core, but since we are a client-centric company, we’ve built in-house subsidiaries that synergize with fäm Properties to enhance the value we offer our clients. We have a real estate development company called Nordic by Fäm, which offers large, ultra-luxury villas with a Nordic look and feel, priced between 60 to 150 million dirhams. Additionally, we have companies in interior design, outdoor media, conveyancing, mortgage brokerage, real estate development management, and a holiday home business called Family Living. We have about 13 companies, and in each business vertical, we’ve established a significant market footprint.

Gareth van Zyl: Firas, it’s been an absolute pleasure talking to you. Thank you so much.

Firas Al Msaddi: Likewise, thank you so much.