Commission earnings of real estate agents have dropped in value by at least 20 per cent in the last couple of months due to a slowdown in secondary market sales, said property agents.
"Due to the market conditions things have changed. We, as real estate agents, have had to deal with a lot of issues including a significant drop in our earnings," George Bedkash, Senior Sales Consultant, Leo Sterling Real Estate, told Emirates Business.
"Our commission earnings have remained the same. However, the time-frame in which we are achieving these earnings has increased."
Despite the slowdown, agents are still earning around Dh200,000 to Dh400,000 a year. During boom time, average commission earnings of real estate agents were as much as Dh800,000 to Dh1 million in a year and sometimes even more, said Bedkash.
However, Tareq Seleem, Senior Property Consultant for Blu Realty International said average earnings per agent was about Dh12,000 to Dh50,000 a month during the past two years.
"However, now it is only averaging around Dh4,000 to Dh6,000 a month. We have now done only two deals in a month, while earlier we used to do six to seven in a month," he added.
A senior consultant at Better Homes, on conditions of anonymity, said she is still employed with the company and is currently surviving on commission.
But she was unsure of how long she would survive on her previous commission earnings, as the real estate sector in Dubai had remarkably slowed down. "I have not concluded a deal since the past two months and, if this situation continues, I will find it difficult to make ends meet," she added.
Companies are finding an alternative for these agents.
According to Seleem, companies are trying to build up a rental portfolio, so that if an agent who has not been utilised for sales, he or she could be used for handling the leasing portfolio.
Agents also said in the last couple of months, they have had to adjust to the regulations being set up by the Real Estate Regulatory Agency.
This newspaper reported on Sunday that real estate agencies in the UAE had been increasingly hiring estate agents on a commission basis.
Commission-only contracts are not legal in the country, the two parties – the employer and the employee (agent) – will have to enter and register the stipulated Ministry of Labour contract, according to a senior lawyer.
"The employer and the employee will have to sign the Ministry of Labour contract wherein they will have to specify a minimum salary. Alternatively, they can enter a side agreement specifying the terms and conditions of employment," Rebecca Ford, a Senior Associate with Al Tamimi and Company told Emirates Business.
On Sunday, this newspaper reported that real estate agencies in the UAE had been increasingly hiring estate agents on a commission basis and were not offering them any basic salary. However, the agents were working on employment visas provided by the real estate company.
According to Ford, the primary issue concerning such agreements is they are uncertain in case if disputes or conflicts arise. "In case of disputes, the Ministry of Labour will look at the labour contract entered by the two parties. However, if the issue is referred to the court, it will take a overall view even considering the side agreement."
Besides, the people employed on commission-only contracts have the legal rights of paid leave, sick leave and end of services, she said. (Parag Deulgaonkar)