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Investors unfazed by surging house prices

Investors will to continue snapping up property in the region despite soaring house prices, further exacerbating the real estate supply shortfall, the ArabianBusiness.com Property Survey 2008 has revealed.

Data from the annual survey shows the more properties investors own in the region, the more likely they are to buy in the future, believing the market will continues its bullish trend and offer buyers huge returns on their investments.
Almost four-fifths (79.55%) of real estate owners said they plan on buying another property in the GCC, the survey revealed.

Nearly three-quarters (73.89%) of respondents who own just one property said they plan on buying additional real estate, mostly as a means of investment.

That figure jumped to 83% for people with two properties and nine out of ten people with five properties or more plan on adding to their portfolio.

But not all respondents retained such an optimistic outlook for the future of the real estate market.

Cost was by far and away the largest deterrent for those who said they do not plan on purchasing another property, with 44.85% of owners not looking to reinvest indicating they simply could not afford to.

More than one-third (36%) of respondents who do not plan to buy another property cited doubts in the strength of the market as their main deterrent.

One in five owners not looking to step back into the market said fears of a market correction was the main reason they are reluctant to make additional purchases.

Experts cite a shortage of housing as a major contributor to record inflation across the GCC, particularly in Saudi Arabia, Qatar and the UAE.

Inflation hit a 19-year high of 9.3% in the UAE and breeched a 27-year high of 8.7% in Saudi Arabia. In Qatar inflation stands at around 14%.

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