Investors concerned more with space than price

by Joel Bowman Sunday, 20 April 2008

Saudi property investors are most likely to go for three- and four-bedroom houses, despite 80% of the kingdom’s population believing real estate prices are too high, according to results from the ArabianBusiness.com Property Survey 2008.

Around 64.29% of homeowners in the kingdom opted for larger residences, with only 7.14% going for single bedroom accommodation
Data from the annual study reveals that existing and prospective home owners across the GCC still prefer to splash out on larger homes despite the overwhelming majority thinking prices are overvalued.

More than four in five people in the GCC and Egypt believe real estate prices to be either moderately or far too expensive, but only one in five respondents said they have or will invest in a more modest, one-bedroom dwelling.

Only one in 15 (6.64%) indicated they have or will consider buying a studio.

Respondents residing in Kuwait were the most likely to invest in four- or five-bedroom residence, with around one-quarter saying they would opt for a larger property.

Investors in the oil-rich Gulf state also indicated they thought real estate there was seriously overpriced. Around one third said property was moderately expensive and nearly one half (45.45%) believed it was “far too expensive”.

Investors in the UAE, where less than 15% of respondents indicated real estate prices were either fair or low, were most likely to go for three-bedroom dwellings over smaller residences.

Results from the survey come amid reports that the GCC is facing a massive housing shortage which, many analysts feel, is contributing to record inflation in the region.

A recent report from HSBC Bank predicted that property prices in the UAE capital of Abu Dhabi would shoot up 25% over the coming year, due mainly to supply bottlenecks.

Some estimates put the shortage of houses in the emirate as high as 50,000 for 2008.

Saudi Arabia plans to invest more than $240.5 billion in its property market this year alone in order to meet the growing demands of its swelling population.

A study by King Fahd University of Petroleum and Minerals (KFUPM) predicted almost two million housing units would be built between now and 2020 at a rate of around 163,750 units per year.



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