Young Arab Leaders workshop calls for creation of Arab real estate index

"There are important factors to consider such as the demographics in the Arab world since most of the population is less than 21 years old. The impact on real estate has been influenced by September 11, 2001 events as many Arabs could not travel and had to do so within the Arab countries.

The second is economic in terms of the prices in the West. Urban planning is now necessary in all parts of the Arab World with traffic models that fit into the requirements and low income housing, experts said.

The workshop was conducted by Adel Al Shirawi, Chief Executive Officer, of Tamweel, UAE and Ali Kolaghassi, Chief Executive of Saraya, Saudi Arabia.

The macroeconomic indicators that are fuelling the real estate boom are the growth in tourism, rising imports and exports, and the number of passengers at airports. The UAE is in a state of 'hyper-natural growth' and that means there is a cascading effect on real estate. Growth and supply have not met each other, retail real estate is increasing at a phenomenal rate and in the coming years there will be exponential growth.

But there are disadvantages too. Capital is needed and in order to sustain the capital, input from abroad is required. There is also a need for market information, which if not available, will result in a communication gap. Another disadvantage is equipment availability, such as cranes. There is not enough equipment leading to the fact that demand is bigger than supply.

Demand still high

The workshop addressed the current trends. There has been an increase in prices but there is also saturation at the high end. However, supply has not been met for the middle to low income.

Certain recommendations were made: The workshop called for the establishment of market indicators (real estate index) for the Arab world, partnerships between the private and public sector, projects to be made for lower income housing and market makers between buyers and sellers.

"The attendance was great and it was an interesting session as many factors were discussed, including the finance part which is essential to the success of any project," said Ali Kolaghassi.

"A lot of people attended, five major initiatives were proposed among those partnerships between the private and public sector and a real estate index as well as a discussion of the pros and cons and ways in which we can mitigate them," said Adel Al Shirawi, Chief Executive Officer, Tamweel.