By Majed Al-Shabib
Riyadh-Mubasher: The new housing programmes launched by Minister of Housing Majed Al-Hogail will boost the sector and lower costs, said Riyadh Al-Thaqafi, CEO of Ewaan Global Residential Co.
He told Mubasher that falling oil prices are not worrying for real estate developers, noting that this ‘defensive’ sector is only controlled by supply and demand.
“Tumbling oil prices will likely affect customers’ income, but will not prevent them from buying houses,” Al-Thaqafi. “The local real estate sector lacks investor confidence due to weak earnings.”
He added that profit margins are below 10% and there are several developers still achieve lower percentages due to exceeding the project timetables.
The real estate industry needs some motives and the absence of foreign investors confirm that the sector is facing some challenges, the CEO said.
He added that the sector will likely witness investments worth SAR 1.5 trillion over the next 10 years, and developers still work at less than 30% of their capacity on rumors about fall in property prices and banks’ refusal of financing for the same reason.
Translated by Abdul Maguid Aboshahla
