Regulation of Real Estate Markets – The Expectation Game

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How does a regulatory framework enhance investor confidence?

What is the right balance of regulatory requirements to connect the goals of both regulator and investor?

How can the private sector help to stimulate investor confidence and appetite?


A clear regulatory framework is crucial to establish initial investor confidence and a consistent application/enforcement of regulations is critical to maintain this confidence.The objective of regulation should be targeted and effective to address market failure/inefficiencies, protect consumers and promote investor confidence.

Active participation by local and regional investors may encourage international investors in a market but the private sector alone can rarely stimulate investor confidence. The absence of clear market regulation will lead to the market suffering long-term credibility issues.

A transparent legal, financial, and entitlement framework is needed to provide relative comfort and confidence for investor entry and exit.

The challenge lies in achieving the right balance between a Government-led regulatory framework and industry/self-regulation to balance the goals and objectives of both regulator and investor.


Why is regulation of real estate markets needed?

Regulation seeks to prevent or address market failure and, in doing so, protect those involved thereby promoting:

  • Efficient markets
  • Protected consumers
  • Competent practitioners
  • Well run businesses
  • Confident investors

Effective regulation increases consumer protection without placing unnecessary burdens on the market, businesses and/or their clients.

Consistent, proportionate and transparent application/enforcement of regulations is critical to maintain such confidence.

Who should regulate – Government or self/industry regulation?

The legislative and regulatory framework should facilitate effective business practice with appropriate customer/consumer protection in a simple, non-bureaucratic way.

However, Governments often find it difficult to do this in a way that reflects the nature of the market, rather than the structure of the Government departments.

Difficulties arise due to a variety of factors including the nature of legislation arising over time, the structure and different policy priorities of Government departments, and limitations on business experience and expertise amongst Government staff.

Government regulation is costly, does not always achieve what is desired and can be inflexible in a rapidly changing world. Government regulation should be a last resort when needed to address and/or mitigate the risk of:

  • Market failure
  • Poor practice
  • Unregulated information
  • Low standards
  • Reputational risk or failure

Government should regulate only:

  • having demonstrated that satisfactory outcomes cannot be achieved by alternative, self-regulatory, or non-regulatory approaches; and
  • where analysis of the costs and benefits demonstrates that the regulatory approach is superior to alternative, self-regulatory or non-regulatory approaches; and
  • if the regulation and the enforcement framework are to be implemented in a fashion which is demonstrably proportionate, accountable, consistent, transparent and targeted.

As businesses better understand the market in which they operate, perhaps it is better for Government to set a framework which establishes a level playing field for industry within which private sector self-regulation can best operate?

How does professional/industry regulation operate?

As an alternative to prescriptive Government regulation, self-regulation by industry/professional regulation can deliver benefits without the increased bureaucracy and burdens that can come from Government-imposed regulation.

The private sector better understands and reflects the structure of the market and can focus on inefficiencies and poor standards, thus protecting the consumer, without the risk of unnecessary bureaucracy and/or unintended consequences.

However, industry-based regulatory schemes such as voluntary, industry codes of practice can sometimes fail to address both problems in the market or improve consumer protection if appropriate incentives or sanctions aren’t also in place to support them or if the code is only adopted by a proportion of a market

Self-regulation can have teeth when delivered by a professional body with an arms-length regulatory structure.

Self-regulation is fundamental to any profession. In addition to technical expertise, in a professional body, ethical standards create the basis for sound regulation in the public interest. Professional ethics distinguish professionals from other practitioners, and provide confidence to clients and investors.

The reputation of professionals and firms and the public interest are likely to be closely aligned. If/when informed, members of the public seek services from members of professional bodies/regulated firms because they know that they will receive good quality services, professional technical and ethical competence. This in turn will incentivise positive behaviour and consumer protection.

Case Study: the RICS (Royal Institution of Chartered Surveyors) model – what does it regulate?

The RICS model provides professional or self-regulation through:

  • Quality assurance of common standards set by professionals with technical expertise
  • Arms-length regulation to ensure independent monitoring of rules of conduct
  • Risk based approach to monitoring
  • One touch wherever possible to ease the burden on businesses i.e. effective and efficient
  • Public protection with independent redress

This model provides quality assurance in a professional environment that will increase confidence of investors, clients and consumers.

As a global professional body, the RICS provides the benefits of self-regulation across the global real estate sector thereby allowing the profession to:

  • Balance the burdens of regulation with the benefits of regulation for the consumer and the profession as a whole
  • Reflect the growing internationalisation of the profession
  • Avoid stifling innovation
  • Keep pace with the speed of developments, in technical areas and in business systems and structures
  • Avoid setting up unnecessary barriers to career opportunities and progression


Regulation can be very costly to business, and the cost can easily be under-estimated, particularly by Government. The objective of regulation should be targeted and effective to address market failure/inefficiencies, protect consumers and promote investor confidence, combined with care to ensure that the scope of regulation is not cast too widely nor applied too bureaucratically.

Over-regulation can make real estate professionals less rather than more competitive in the market place – and their clients/consumers will bear the cost in the long run. Self-regulation can get the balance right – to raise quality, protect clients and consumers while supporting economic growth by minimising burdens on business – because it is designed around the business and client need, not Government structures.

A simple Government regulatory framework is needed to provide a level playing field field for industry within which private sector self-regulation can best operate rather than strict, central control that attempts to second guess how a market can or will operate.

Given the right framework, self-regulation is perhaps better at getting the balance right to achieve investor confidence.

RICS – what is it all about?

RICS logo

RICS – Five Wives & One Husband (5W1H)


The RICS (Royal Institution of Chartered Surveyors) is the world’s leading professional body for regulation and setting standards for the land, property and construction industry.

As an expanding global property professional body, the RICS aims to:

  • Regulate and promote the land, property and construction profession
  • Encourage and maintain the highest educational and professional standards
  • Protect clients and consumers through a strict code of ethics
  • Provide impartial advice, analysis and guidance on real estate matters



The RICS ( has more than 100,000 members operating in almost 150 countries. There are also some 500 RICS accredited university degree courses with currently over 34,000 students to ensure that membership remains strong in the future.

Members are known as Chartered Surveyors, recognised by the designation after their name – FRICS (Fellow) or MRICS (Member).


The RICS can trace its history as far back as 1792 when the Surveyors Club was formed in London. In its current form, the RICS was created in 1868 in the United Kingdom receiving a Royal Charter in 1881.

The RICS represents the oldest and most established professional body in the field of land, property and construction in the world.


As an independent organisation, the RICS acts in the public interest setting and regulating the highest standards of competence and integrity amongst its members and providing impartial, authoritative advice on key real estate issues for business, society and governments worldwide.

RICS members specialise in all matters across the property lifecycle – from development and construction advice to valuation of assets and investments, from project management to property management and dispute resolution services across all aspects of land, property and construction – in total, there are more than 160 specialisms!


Today, the RICS has more than 100,000 members globally, with the majority of new membership growth being outside the UK.

The RICS works closely with other professional organisations around the globe to promote professional standards and has a network of offices (with over 500 staff) reaching across the world’s major and emerging economies to support the delivery of its objectives.


The focus of the RICS as an organisation is firmly set on professional standards.  RICS practice standards and codes of practice are internationally renowned and regarded as a true mark of quality – a valuable asset that demonstrates to clients and the market that the advice provided adheres to the highest standards in the world. Globally, financial institutions, corporations and governments depend on the consistent and reliable level of expertise and advice on real estate that qualified RICS members provide.

The RICS publishes over 500 industry research and policy papers every year – leading real estate thinking globally. Members have access to the world’s largest online property, land and surveying library together with professional guidance and market-leading survey information.

The RICS seeks to influence governments, international organisations and key stakeholder groups around the world with the aim of developing and embedding truly international standards and creating a vibrant and sustainable land, property and construction sector.


As people, governments, banks and commercial organisations continue to demand more assurance of certified standards and ethics, attaining RICS status is the most highly regarded and recognised mark of property professionalism.

Why did I decide to join the RICS?

The RICS designation means that you are a member of the world’s pre-eminent professional organisation in real estate. By qualification, it is clear evidence that you have achieved high standards of competence and ethics in your chosen career. This provides an international passport opening doors to business, networking and career opportunities globally.

An RICS qualification provides me with unrivalled credibility and status in the market and, at the same time, provides confidence to my clients and business partners.  I carry a valuable designation after my name (FRICS); a mark that is both globally recognised and highly valued throughout the land, property and construction industry.

This gives me a competitive edge as the RICS qualification is highly regarded by clients – in fact, everyone that I come into contact with in business. It also sets me apart with employers and ensures that

Leadership – From The Top

Leadership - Dice

For my first post, I wanted to cover a subject close to my heart – Leadership.

What follows is a transcript from an interview which I provided to Modus, the RICS (Royal Institution of Chartered Surveyors) monthly magazine circulated to c.100,000 Members wordlwide.

The article, entitled ‘From The Top’, covered views from 25 inspirational people in the global real estate industry who have risen to the top of the profession to find out what leadership means to them. Only a small excerpt from the interview with myself was published – in the 10 Industry Leaders section of the article.

Q: What do you believe are the most important qualities for a good leader in the real estate business?

A: Questions about leadership qualities always generate responses full of adjectives seeking to capture the key ingredients to the recipe for leadership excellence and success. For myself, an individual must feel invigorated by the success of others to become a truly effective leader.

Teams perform at their best not when the boss demands it, but when their colleagues expect it. A good leader brings a team together around a common purpose, agrees upon goals & objectives and then uses the social bonds between members to influence their behaviour. The key is to get team members to work hard not to please you, their leader, but so that they don’t let everyone else down. This indirect approach is hard for some leaders but, in my experience, individuals perform better when they feel part of a team.

For specific individual qualities, the following version of the PRIDE acronym works for me:

  • Passionate – a leader must be passionate about the goal, objective or purpose
  • Respect – a leader must encourage and listen to the views of others and, from this, earn their respect which is so essential to achieving success
  • Inspirational – a leader must have the charisma to generate interest and following in his/her ideas
  •  Daring – a leader must always test limits and push boundaries
  •  Expert – a leader must know the business in which he/she is operating

“Leadership is the art of getting someone else to do something you want done because he wants to do it”. Dwight D. Eisenhower

Q: Are there special skills that a leader needs in the Middle East?

A: The Middle East is a multi-cultural business environment which requires a clear understanding of etiquette, protocol and accepted business practice – successful leaders need to be adaptable to all business environments.

The Middle East is still an emerging or developing market. There is still a very limited legal and regulatory framework for real estate – successful leaders need to be opportunistic to take advantage of these less well-developed markets and capable of working without structure.

Other characteristics of the Middle East include rapid change, uncertain pace of decisions and, at all times, a need to expect the unexpected – successful leaders need to develop a range of skills to protect teams from the impact of these issues.

Q: Thinking about the last few years and the issues facing the real estate industry today, what are the particular skills needed for future leaders?

A: Just one here – having the confidence to drive growth and set courageous goals!

A copy of the full article can be downloaded from my Publications page. Alternatively, use the following link to this edition of the whole magazine: