Holland Gulf Chamber of Commerce » real-estate

Makkah records SAR59bn real estate deals in 2013

jochemgeheniau — Tue, 21 Jan 2014 09:11:21 +0000

Real estate index for Makkah region surprised all forecasts that said deals in the sector will point to the downside during 2013.
The numbers, values, and scopes of the deals up to the end of last year witnessed a rise of 350 percent compared with a year before.
The value of deals during the year stood at SR59.4 billion, against SR16.1 billion in the year before, an increase of 350 percent.
The number of deals during 2012 registered a pickup of 4.677 deals and increased to a record of 17.920 deals last year, an increase of up to more than 400 percent.
Real estate experts expected the index to rise in the holy capital this year, and the value of deals in the sector to rocket up to SR80 billion in view of the massive development project in the real estate sector, and the generous expenditure on the infrastructure of the city.
Head of the Real Estate Committee at Makkah Chamber of Commerce and Industry Mansour Abu Al-Reesh stated that the bearish real estate market forecasts by some analysts were not based on scientific grounds or on studies of the markets, adding: “They were just inaccurate speculations.”
Abu Al-Reesh projected real estate market to witness a big upbeat, and a rise in the value of the sector’s deals to more than SR80 billion because of the giant projects in the city, mainly the projects of public transportation, the ring roads or circumferential highways, the train stations and the development of slums that entailed expropriating thousands of properties and pumping more than SR100 billion as compensations into the market.
“Investment infrastructure in the holy city has become attractive to more and more investors who recently moved to establish large investment portfolios in building large residential projects, such as hotels and residential towers.
Yusuf bin Awad Al-Ahmadi, a developer said real estate investing in Makkah had become one of the most successful investments. “This has led to the revival of the real estate market, in addition to the disbursement of compensation related to the expropriated properties for the expansion of the Grand Mosque,” he added.
Another developer, Meshal Al-Zaiydi said the market is bound to have more deals this year because of the state’s expenditure on development projects. “The construction of quality hotels and the other residential projects will increase the capacity of the city to accommodate more numbers of Umrah and other seasonal pilgrims,” he said, adding that the majority of beneficiaries of the compensations are expected to buy new properties, which will lead to an increase of land development and residential projects.
Al-Zaiydi revealed that many capital owners and real estate investors moved to invest in the holy city where several conglomerates emerged to buy lands for constructions.
Agreeing with him, another developer, Tawfiq Suehra said real estate market in Makkah was witnessing a rebound.
“The attractive investment environment in Makkah has become the focus of many real estate investors and venture capitalists who have moved to form large conglomerates, pumping huge liquidity in the market.”
“This year, 2014, of all real estate investments, the hotel sector will receive bigger investments than before, with capitalists moving toward safe investments in Makkah in view of the increasing number of Umrah and seasonal pilgrims that will come once expansion and construction projects are completed,” said Fayez Zaqzoq, a developer.
On the other hand, real estate expert Marie bin Mubarak bin Mahfooz said real estate prices will spike this year because of the increasing demand on lands and properties. “This quantum leap in the real estate market during the last five years made real estate investors and venture capitalists dribbling,” he added.

Riyadh tops in real estate with SAR99bn deals

jochemgeheniau — Wed, 04 Dec 2013 10:31:05 +0000

Riyadh, with SR99 billion real estate transactions, has ranked as the most sought-after city in the Kingdom. The capital city outweighs Jeddah, which had recorded more than SR90 billion of real estate transactions as per the real estate index issued by the Ministry of Justice.
The real estate sector has revealed the positive impact of the economic and social stability experienced across the Kingdom as per the Ministry of Justice index. The index closed at a value of SR99 billion of commercial and residential deals for the year 1434H in Riyadh, surpassing last year’s deals that registered SR87 billion.
The index recorded more than 43,476 real estate deals in Riyadh city covering a total area of 227m2, with SR47 billion commercial transactions and more than SR51 billion residential transactions. This reflects the need toward seeking large locations to develop residential units to meet the increasing demand in the market.
Jeddah comes second with more than SR50.6 billion of residential transactions and SR39.9 billion commercial transactions, which represent 40,132 deals and over 90m2 of real estate area.
Majed Al-Hogail, MD, RAFAL, described as the premier residential communities innovator, said: “The economic and real estate cycle is moving rapidly and positively, and the demand on innovative residential units is increasing, which urges the real estate developers and investors to work on providing innovative residential solutions.”
Al-Hogail added: “We at RAFAL are investing in new strategic locations and the innovation of more than 3,950 residential units over the next 5 years with cost of over SR5.1 billion. Our growth strategy covers the Kingdom with new and bold opportunities within a prosperous real estate investment in the Kingdom.”
To facilitate the ownership of housing units by the citizens, more mortgage companies will be launched in 2014, as the Saudi government is working on activating the mortgage systems as per the enacted mortgage laws and regulations, to work alongside local banks and related governmental sectors, such as the Real Estate Development Fund and the residential units provided by Ministry of Housing.
The first half of the year 1434H has witnessed more than 70 percent of real estate deals, which indicates the investors’ activity who conducted SR62 billion of real estate deals in Riyadh city alone.
Al-Hogail said: “RAFAL leads the dynamic lifestyle pattern that requires an enriched, homogeneous social environment, as well as common facilities adhering to environmentally friendly and safety principles to create vibrant residential hubs, self-sustained communities, desired by many Saudi and expatriate families.”
According to Al-Hogail, the challenge facing the real estate market in the Kingdom is interesting, where the demand is increasing at an annual rate of 8 percent and is expected to last for a minimum of 10 years.
“This requires a consistency between the way of business and the regulations and challenges faced by the sector. Therefore, the performance has to be distinguished in order to be among the leading real estate development companies.”

Kingdom’s real estate market stands at SAR1.5 trn

jochemgeheniau — Tue, 12 Nov 2013 08:27:21 +0000

Real estate circles are waiting for a decision from the Council of Ministers regarding the allocation and prioritization of the lands available to the citizens through the scheme of “A land and a loan.”
The parties involved in the scheme are mainly the Ministry of Housing, the Ministry of Justice, the Ministry of Municipal and Rural Affairs, the Ministry of Labor, the Saudi Electric Company, and the Saudi Credit Company.
It is expected that the criteria for allocation will include the age of the home-buyer, monthly income, and the number of family members. The new mechanism will determine the eligibility of applicants and the type of subsidy they can get.
Khalid Al-Ghamdi, chief of the real estate community in Jeddah, told Arab News that the new scheme comes at a time when the Kingdom is going through a shortage in the supply of housing units. “We need about SR500 billion to fund the construction of 1.25 million housing units by 2014. However, we expect real estate finance for this year to be around SR60 billion,” he said.
“I believe that the Saudi real estate market is still attractive enough for investors and developers to take even a small chunk of this huge market, especially during this period of slowdown in global markets. The Saudi real estate market is worth an estimated SR1.5 trillion, while the house construction market is worth an estimated SR1 trillion,” he added.
“The real estate and construction sectors in the Kingdom provide the best and most attractive investment opportunities in the region. Currently, more than 285 real estate projects worth SR260 billion are either under way or being planned. The internal demand is the strongest engine of growth for the real estate sector due to the larger size of the Kingdom and increasing population. The current demographics require that we build around 3 million housing units by 2040 to meet the needs of the growing population,” he said.
He expects that when the Mortgage Law is enacted, it will make it easier upon the citizens to own houses in the areas they like, and it will enable the business sector to contribute, in view of the banks’ reluctance to lend those home buyers who want to own a house of their own. “This law will regulate and give a legal status to mortgages. It will be a strong point in favor of the Saudi real estate market. The law will reflect the Shariah teachings with regard to financial transactions,” he said.