The Ripple Effect

By Lubna Hamdan – Arabian Business

Dubai: The CEO of the UAE’s largest real estate website Property Finder has hit back at nearly 100 brokerages who have taken down 9,000 listings from the platform, calling them “emotional”.

In March, 260 brokerages in the UAE came together to form a united front in a bid to pressure portals to provide 6-3 months worth of advertising fee relief as Covid-19 lockdown measures hit the real estate sector. 

Brokers must pay large sums to portals like Property Finder, Bayut and Dubizzle to be featured on the platforms, with some paying nearly AED1 million in yearly fees, according to sources. 

Property Finder initially offered brokers one month free on their platform Data Finder, followed by a 33 percent discount on the portal for the next two months. After pressure from brokers, it came back with an offer of two free months.

But speaking to Arabian Business, Property Finder CEO Michael Lahyani says brokers are panicking despite being in lockdown for only three weeks.

“Some of them are panicking. We’ve been in a lockdown for two weeks, and it’s being extended for another week, but to come out and ask for three months? Of course it’s going to take time until the market picks up again but who says there’s not going to be any business for three months? It’s wrong because even last week the DLD were registering transactions – a lot less – but there are transactions still happening. It’s not like you cannot technically close a transaction,” he said.

“These are small businesses that are afraid of the future and uncertainty in the market and they don’t have banks that would help them with a loan in this market so they’re turning to us, as in, who’s going to help us? Let’s turn to Property Finder… We believe we’ve been forward thinking with this. But you know, people are emotional during these times and I understand it. There’s so much uncertainty around how long it will last and there’s a little bit of a panic,” Lahyani adds.

Life Or Death

Richard Waind, group managing director at Better Homes, disagrees and says discounts are a matter of ‘life or death’ for smaller brokerages.

“It’s a little disingenuous calling anybody emotional in this period,” he told Arabian Business.

“People are trying to navigate and keep their companies afloat in what is a challenging time. For some of the smaller brokerages in particular, those costs will be life or death if they’re not getting any income in.”

So is the case for Abu Dhabi-based Miramar Property Management, one of the small brokers that terminated its contract with Property Finder.

Marwan Yasin, a property and financial specialist at the company, says Property Finder are “taking advantage” of their position as the largest real estate platform in the UAE.

“They [Property Finder] are very aggressive and unprofessional… What I didn’t like is that they were calling us brokers ‘opportunists’. And this is not an opportunistic time. We are really having a hard time. I used to get 50 calls a week on my phone and now I’m barely getting one call a day. Even if they changed their minds because their strategy was going downhill, it was very unethical. 

“They have a monopoly going on… They were just pressured into [giving discounts]. They were negotiating at a time where they shouldn’t have been negotiating. It’s just very unethical. We have overheads, we have staff we need to pay, phone bills, rent, and people are scared to leave their houses, they don’t want to view houses. 

While Miramar will return to the portal because it needs the exposure, Yasin said the company prefers to work with Property Finder’s rival Bayut. While it originally offered to defer upcoming cheques by three months, it later changed its offer to one month for free and a 50 percent discount for the two months to follow. It has also offered all real estate brokers across the UAE free space for 20 listings irrespective of whether they are on the platform. Dubizzle, on the other hand, offered one month for free, subject to renewal.

“Bayut is more lenient towards prices depending on their relationship with their customers… And their customer service is excellent,” Yasin said, “to the extent that they knew our chairman was sick so they came to the office and brought balloons. Imagine that”.

Yasin says Property Finder offered brokerages a better deal if they were to drop competitors like Bayut, but Lahyani says this “has been a bit distorted” and that the portal “rewards people who work with us in a close partnership rather than tell people to drop other portals. You can spin that in two different ways”.

It argues that it was the first to offer brokers a relief package and “paved the way” for the discounts to take place.

“They [Bayut] didn’t offer anything until we did. They initially offered deferred payments, no discounts, then when we did it, they were under pressure. I’m not sure the industry recognises that we actually paved the way for these package reliefs to happen. Had we stayed put in our position, our competitors would have stayed put as well,” Lahyani said.

Andrew Cummings, managing director at Dubai-based LuxuryProperty.com, says Property Finder “probably mishandled the communications around this” and failed to see the severity of the crisis quick enough. But he points out that Bayut was initially slow and “skirted some good will” because brokers were angry with Property Finder.

“But they all need to look and see how they can make this more sustainable… The sad fact in this industry is a lot of people are reliant on these portals so they don’t have a lot of marketing strategies. We’re lucky that our website is the most visited after the portals so we get the majority of our leads from that but a lot of people survive by these portals,” he said.

“These portals are totally predatory. They know they’ve got us over a barrel. They gave us what they gave us because they knew we didn’t have a lot of choice. And that’s going to come back to bite them at some stage because we are going to need them to start being more flexible,” Cummings says.

In Property Finder’s defense, the portal has had to lay off nearly 100 staff members and close two markets to provide relief for brokers.

“Property Finder have actually done a lot internally to do this. In order to do this, they’ve closed down a couple of international markets, they have reduced salaries on a lot of people and they have furloughed 100 of their staff, so they’re hurting. It’s taken a bit to do that. 

“Could they have done more? Yes, 100 percent, but they are feeling the same pain we are. I personally had to furlough eight of my 15 operation staff. There are challenges we’re all facing and it was important for us to see that our partners in the portal were also experiencing challenges. It’s not fair for us to lose 25 percent of revenue while they offer you a 5 percent discount. It’s not comparable,” said Cummings.

Property Finder’s Lahyani said the portal is indeed experiencing its own challenges due to the coronavirus lockdown.

“This is not Europe where the government is [paying] 80 percent of your salary. We have to figure this one out on our own… Sometimes the brokers don’t understand and perceive us as a big company that is very wealthy and can afford to navigate through this crisis without any challenges but like any business, who can afford to go a month without revenue?” he said.

The portal has decided to refocus on its core and profitable markets, including the UAE, and has closed down its business in Morocco and Lebanon. 

Bayut, on the other hand, has “gotten away without feeling any pain,” according to Cummings.

“Bayut haven’t done any of that. I’m not aware of them reducing salaries or doing anything. So at the moment I think Property Finder, in many ways, have felt some pain to give us that, whereas Bayut are sort of getting away with not feeling any pain. We don’t want them to feel pain but our businesses need to survive,” he said.

Bayut CEO Haider Al Khan has confirmed that the company has not laid off staff, but told Arabian Business it needs “a bit more time to reassess what’s going to happen”.

On Tuesday and as part of its relief package, Property Finder will launch the “House Hunt from Home” initiative where customers can experience live viewings on the website. It will include 360 tours, virtual tours, floor plans and social media tours to help make house hunting a digital reality.

*Recent media reports falsely stated that brokers had removed 20,000 listings from Property Finder. The real number, according to both the portal and brokers, is around the 9,000 figure.​

This column does not necessarily reflect the opinion of OVERWRITE.ai and its owners.

Lubna Hamdan is an Editor at Arabian Business

This story has been published from an online news feed without modifications to the text. Only the headline and image have been changed.

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