Blessed: Mecca's real estate sector defies expectations
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.
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.
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