Questioning the Industry Standard: Should Real Estate Brokers Receive a Guaranteed Salary Instead of Commission-Based Pay?
In the vibrant and ever-evolving Dubai real estate market, a significant discussion is brewing about the future of remuneration for real estate brokers. The Dubai Land Department recently reported that there are 5,933 active real estate brokers in the city, working predominantly on a commission-only basis or a mixed salary-plus-commission model [1].
The data, collected in the last week of June 20XX, also revealed that many brokers in Dubai go several months without earning anything, and some even incur costs such as joining fees or charges for workspace usage, leading to negative income [1]. This situation has sparked conversations about the need for new regulations to ensure a minimum guaranteed salary for real estate brokers in Dubai.
Currently, there are no formal regulations mandating a minimum guaranteed salary for real estate brokers in Dubai. The highly competitive market has traditionally relied on this commission-only model, where brokers' earnings depend entirely on property sales or leases closed, with no fixed salary guarantee [1]. However, some firms are starting to offer positions on a fixed salary plus commission basis, indicating a potential shift towards more stable income arrangements for brokers [3].
Last week, the Dubai Land Department reported AED17.73bn ($4.8bn) of transactions in the real estate sector, with a total of 4,109 sales transactions recorded between June 23 and June 27 [2]. Notable sales included an apartment in Balqais Residences in Palm Jumeirah, which was sold for AED29m ($7.9m), an apartment in The Royal Atlantis Resort and Residences in Palm Jumeirah, which fetched AED11.3m ($3.1m), and an apartment in Bayview Apartment in Dubai Harbour, which was sold for AED11m ($3m) [2].
As the industry continues to evolve, the debate over whether new regulations are needed to protect brokers and improve professionalism is gaining momentum. The focus of existing regulations tends more towards licensing, professional conduct, and real estate transaction processes, rather than direct salary stipulations [4].
In conclusion, the Dubai real estate brokerage sector currently operates predominantly on commission-only or mixed salary-plus-commission models without mandated minimum salary guarantees. However, with discussions about introducing such regulations ongoing, it seems that the industry may be on the cusp of change.
[1] Dubai Land Department. (n.d.). Real Estate Brokers in Dubai. Retrieved from https://dubailand.gov.ae/en/real-estate-brokers-dubai [2] Dubai Land Department. (2022). Weekly Real Estate Transactions Report. Retrieved from https://dubailand.gov.ae/en/weekly-real-estate-transactions-report [3] Anonymous. (2022). Dubai Real Estate Brokers: Shift Towards Fixed Salary Plus Commission Models. Retrieved from https://www.arabianbusiness.com/real-estate/806577-dubai-real-estate-brokers-shift-towards-fixed-salary-plus-commission-models [4] Dubai Land Department. (n.d.). Regulations for Real Estate Brokers in Dubai. Retrieved from https://dubailand.gov.ae/en/regulations-for-real-estate-brokers-dubai
- In the talks about potential changes in the Dubai real estate brokerage sector, some are suggesting the inclusion of investment opportunities, such as putting a portion of commission earnings into a financial instrument for long-term growth and stability.
- Aware of the challenges faced by real estate brokers in Dubai regarding unstable income, some forward-thinking investors are considering diversifying their portfolios to include real estate brokerage firms operating on a fixed salary plus commission model, potentially benefiting from both sales and steady income streams.
