With the fast-looming debut of AEC 2015 in December throughout the ASEAN region, the question of professionalism in Thailand’s real estate sector is one that will need to be addressed – especially when some of its regional competitors are already years ahead in terms of guidelines, ethical codes, regulation and laws.
Right now there is nothing stopping you and I, or the man or woman next door, setting up business as a real estate agent. That person could have years of experience or none – but there is no way to tell.
Let’s look south for a way one market went from no regulation less than six years ago to a fully regulated real estate market now.
To address the issue of real estate regulation in Singapore, the Council for Estate Agencies (CEA) was formed in 2010 by the city-state government with the aim to develop a professional and trusted real estate agency industry. To do this they focused on three objectives – effective regulation, industry development and consumer education.
“To become a real estate agent in Singapore you must pass an examination every year and complete regular educational sessions that count towards your yearly quota of industry knowledge-building.”
Before the establishment of CEA, the property industry operated in a free-market, laissez-faire approach and it was unsustainable. Arguably that’s how Thailand’s real estate sector operates today. There was no governing body to ensure fairness and transparency in property transactions, and as a result there was a general lack of standards and professionalism.
Ismail Gafoor, Chief Executive Officer of PropNex, a leading agency in the city-state with more than 5,000 agents under its wing, told Dot Property Group: “Estate agencies and real estate salespersons are engaged as intermediaries in the sale, purchase and lease of properties, and play an important role in helping their clients get the best value for their property transactions.
“To perform this function well, it is essential that they do their work professionally and ethically, and act in the best interest of their customers. They must be well acquainted with government rules and procedures, help clients through the whole buying and selling process, give them correct and proper advice, and generally ensure that their property transactions are as smooth as possible.
“The CEA is a much needed piece of the puzzle in an industry and is a clear step in the right direction. CEA instituted legislations and guidelines that govern the industry, it has a discipline committee that looks into alleged offences by real estate salespersons or complaints by consumers etc. It was a place whereby consumers can go to for help if they need it.”
He concluded that, in essence, the CEA has created a professional and trusted real estate agency industry where all stakeholders can expect professional standards in a fair and informed marketplace.”
Suphin Mechuchep, Managing Director of JLL Thailand, supports the need for some form of real estate industry standards.
She told Dot Property Group: “Today, anyone can represent an owner or a prospective buyer in selling or acquiring property in Thailand. There would be nothing wrong with this if the broker is honest and informed about the market enough to be able to provide sensible opinion on the seller and buyer’s price expectation, and know how to manage the transaction from the beginning to the end of the process.
“In reality, many self-claimed property brokers focus solely on obtaining commissions. Some of these brokers try by all means to close the deal, from providing the seller or the buyer with insufficient or inaccurate information about the property and related regulatory constraints and market dynamics to defrauding buyers to acquire worthless property assets. This is not good for the property industry.”
Acknowledging the moving towards a market like Singapore, she added: “It may be hard to regulate real estate brokerage profession in a less matured real estate market like Thailand where many buy and sell activities still rely a lot on connections.”
She added that her real estate firm does sees the need for the industry to have an agreed set of clear guidelines for professional real estate agents, along with a certification programme by a reliable institution such as a university, with support from well-respected property professionals from private and public organisations.
“This will help lift the standards of the real estate agency profession and provide a comfort to sellers and buyers who may prefer to work with qualified agency professionals,” she concluded.
In a country where a lack of transparent, up-to-date information, let alone a set of professional standards that all agents must adhere to, fails to exist, Thailand should perhaps be seriously looking south to emulate the success that Singapore has enjoyed in its own attempts at real estate industry regulation.
AEC 2015 may just provide the motivation – and some form of regulation may only be a matter of time.
Do you agree or disagree that Thailand’s real estate industry needs regulating? Have your say by leaving a comment or email Group Editor andrew.batt@dotproperty.co.th with your opinion.