When a 28,000 sq ft property was sold at the staggering rate of Rs 14,830 per sq ft at the posh Boat Club Road in Chennai in December 2005, little did the investors know that this property deal would send property rates soaring in the city. While most real estate developers would like to think that the realty boom, and huge investment in the real estate sector has seen world class infrastructure spring up in cosmopolitan cities like Mumbai, the financial capital of the country, Delhi- the political capital of the country and Bangalore, the IT hub of India, this is not strictly true. Experts opine that Chennai is not left behind in the race. The real estate boom has caught up not only with the major cities in the country, but relatively small towns like Chandigarh, Hyderabad, and Pune are also tracing sky scrapers. In January 2008, Chennai-based Sabari Foundations declared that they are to develop 308 apartments on a 10-acre site near the Sipcot Industrial complex at Siruseri. The estimated project cost is to the tune of Rs 180 crore.
Budget 2008 has not done much for the real estate sector in India, but the change in income tax rates, mean that there will be more money in the hands of the prospective home buyer. Coupled with this, construction costs are expected to come down on account of reduction in duty and Cenvat. But Housing loan interest rates have not come down meaning that EMIs continue to worry prospective buyers. Will all these translate into a higher demand for housing in Mumbai? The last four years have seen a tremendous price hike in retail housing sector on account of demand far outweighing supply. Out of the 90 lakh homes on sale in Mumbai, only 30% have been built. Prospective home buyers may start scouting for affordable property in surrounding areas like Nasik and Pune. A recently released report on the ‘Housing ‘un’affordability in Mumbai’ by CRISIL underscores the fact that owning a home in Mumbai remains out of reach for more that half the population of Mumbai. While buying a home in Mumbai will remain a dream for the lower middle class, prices for properties in the range of Rs 40 – Rs 50 lakh should see a much needed correction.
So you are lattempting to understand the real estate position in Mumbai, but you are not clear in your mind the market picture of real estate in massive Mumbai?
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Property experts expect Saudi Arabia’s real estate sector to hit new highs over the next three years. Several economic, legislative and financial factors will contribute to the continuing boom. The estimated growth rate of fixed capital stock is 45-55% from 2005 – 2007, following the sharp increase in the Saudi Arabia’s GDP from £5.5 billion in the year 2000 – up to almost £8 billion currently. Annual property transactions are worth £26.5 billion and investments of more than more than £159 million.
The primary cause is rising oil prices, reaching an all-time-high of $102 per barrel, generating strong liquidity and fueling the real estate market.
The Saudi government’s is spending large amounts on basic infrastructure and residential projects for low-income segments in order to meet the rising growth in population in major cities, put at 4% per annum. The Saudi government has seen the needs of a growing, young, urban population and is no longer focusing soleley on luxury villas and palaces. Statistics show that up to 60 percent of the total population is in need of around 1.2 million residential units over the coming period, with this number likely to increase to around 2.9 million over the next twenty years.
Saudi Arabia’s population is the largest in the Gulf and current demand for housing is far outstripping supply. The capital Riyadh contains the largest population Kingdom-wide, estimated at 23 % of the total population, followed by Makkah at 24% then the Eastern Zone at 14%.
A fluctuating stock market combined with an inability to reap enough profits are forcing investors to shift their businesses to alternative markets – primarily the mid-level income housing market. Official figures released confirm a large upswing in the total liquidity available on the local market for investment, plus a considerable increase in foreign investments – particularly from neighboring Gulf states.
Kuwaitis rank first in Saudi real estate investments, then the Bahrainis followed by Qataris, while UAE investments come last. Omanis have been remarkably absent from the Saudi market over the past period. The Saudi property boom also owes a great deal to relatively lower risk levels and more realistic growth levels compared to the UAE. Demand is expected to increase on the housing market over the coming period with the approaching implementation of the Common Gulf Market, declared in Doha.
The report also underscores a remarkable development in Saudi legislative system; a fact which the report says is verified by the establishment of economic zones and cities that have drawn in large investments into the market, with businessmen being encouraged by additional incentives and exceptional privileges in terms of the entry and exit of laborers, businessmen and investors. Saudi is still in the process of improving its property legislation to further attract more foreign investment.
A recent project, the King Abdullah Economic City will be a multi-stage development with construction having started in 2005. This mega project will closely integrate itself into the Kingdom’s ongoing drive to expand the economy, create employment opportunities for its young population and function as a catalyst to attract foreign investment, global trade, commerce and industry. Based on initial forecasts, the project and its several components will create up to one 1,000,000 job opportunities in the various industries and service-based companies that will open in the City.
