Boost for medium, small-scale developers
Real estate developers and mortgage financiers in the Middle East region should focus on medium and low-cost developers to ensure a sustained return on investment, according to Adel Al Shirawi, CEO of UAE home finance provider Tamweel.
“The cyclical nature of economy dictates that eventually at some point in time prices will begin to stabilise as supply moves closer to demand. Investment in medium and low-cost developments will enable developers to greatly reduce the risk caused by price fluctuations,” Al Shirawi said.
According to Al Shirawi, developers are still launching projects based on early studies, which predicted high overall demand for housing.
“Developers should dynamically evaluate demand and supply situations, and the volatile and fluctuating nature of the real estate sector in the region,” he said.
“More careful analysis of the nature of the demand for housing shows that the situation has begun to change and developers need to address the increasing demand for medium and low-cost housing,” he added.
Al Shirawi was speaking at the opening panel discussion titled: ‘Luxury development gone wild,’ which focused on the problems caused by the sheer scale of luxury development in the GCC cities and the ways in which developers can minimise their risks.
The Tamweel chief also predicted that, given the rapid demand for commercial space in the region, Dubai’s real estate growth model would be replicated across the Middle East in the next few years.