رAddressing the topic of whether the Middle East presented a best case scenario globally for investment in real estate, conference delegates at Cityscape Dubai stressed continued government infrastructure development as a key factor in confidence in and recovery of the sector.
Managing director of CBRE Middle East, Nicholas Maclean, said that while they had looked at low-cost housing projects, it was difficult to make the numbers work: “This has to be kick-started with government assistance since it could have a beneficial impact on the region as a whole,” he said.
Citing the example in Jordan, where the government has put in place a series of measures to germinate low-cost housing schemes, ceo of the Aqaba Development Corporation HE Eng Imad Fakhoury said reverse engineering was called for to determine what sort of costings the markets would bear.
“To make this work, first you have to analyse incomes, cost out the affordability of mortgage payments, and then come up with your costings,” he said. “The government has provided land almost free of charge, extended credit and worked to bridge the interest rate challenge – as well as supporting private developments by buying in to these schemes to provide accommodation for government employees.”
Equities and asset management specialist, Mohammed Al-Ali from Kuwati’s Alaman group said while it was easy to quantify the vast requirement for low-cost housing, the supply was not keeping pace with this demand, and government schemes could not deliver at an economic cost.
“If the land is not provide free, it is just not viable,” he said, emphasising development of the sector should be treated as a quasi-social service, introducing methods such as BOT (build, operate, transfer) in new private/public partnerships.
"The demand for low-cost housing in the UAE is undeniable - it will undoubtedly involve some form of PPP. The UAE has a strong track record with these sort of initiatives, said Chris Speller, Group Director, Cityscape Dubai.
Real estate marketer, Michael Shvo, raised another potential solution with the example of countries such as the UK and the US, where private developers were often mandated by governments to include a percentage of low-cost housing in any new scheme.
For full details of Cityscape Dubai 2009 please log on to www.cityscape.ae
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