Makkah real estate industry ‘in chaos’



MAKKAH: ARAB NEWS

Published — Sunday 20 January 2013

Last update 20 January 2013 1:37 am

| نسخة PDF Print News | A A

Every city and town in the Kingdom is grappling with the housing problem. It is beyond the means of an ordinary citizen to buy a plot or house while speculators and investors dominate the sector. The property situation in Makkah is further complicated.
Prices have reached exponential levels and the market is ridden with unforeseeable risks. The price rise has affected not only the Central Zone surrounding the Grand Mosque but reached the fringes of the city, Al-Madinah daily reported yesterday.
“Now massive investment activities have spread to all streets and roads and even to the city suburbs including the third and fourth ring roads,” said Al-Shareef Mansour Abu Rayyash, chairman of the Real Estate Committee at the Makkah Chamber of Commerce and Industry (MCCI).
Abu Rayyash blamed the municipality for not providing a congenial environment for the healthy growth of the real estate industry.
“The Makkah Municipality should take immediate steps to simplify the issue of construction licenses and lay down clear guidelines and specifications for buildings. Instead of simplifying its procedures, the municipality takes more than a year to register a property document. No municipal official can deny this fact,” he said.
He added that the real estate industry in Makkah has reached such proportions that 50 percent of the real estate portfolios in the Kingdom are dominated by Makkah properties. He said real estate activities in Makkah would increase in future but without any official incentive or encouragement to help the investors.
Mustafa Rida, a member of the Real Estate Committee in the MCCI, slammed the municipality for lack of coordination in implementing projects causing a lot of hardships for the real estate industry. Lack of coordination while implementing various projects of the municipality and of different departments has led to rise in property prices and also the aggravation of the housing crisis, he said.
He recommended that there should be a coordination committee in the municipality that regularly monitored the implementation of projects. He said lack of coordination had led to failure of millions of riyals’ worth of projects, which deprived jobs for citizens and delayed economic progress.
He blamed the municipality for the long delay in issuing building permits. “Lack of transparency of future municipal plans posed a threat to real estate activities. A man invests a lot of capital to construct a building and only later he learns that there is a municipal project at the same spot and the building has to be demolished,” he said.
He added that the real estate boom is artificial and a day will come when the unnatural boom would turn into bust.
Muhammad Malibari, deputy chairman of the Real Estate Committee at the MCCI, compared the real estate business in the city to a moving target which is difficult to hit because of poor planning. He said the speed at which land prices went up was astounding.
Malibari said the demolition of 25,000 properties for the five-year expansion projects in Makkah was a major factor that triggered the rapid rise in prices. Another problem that baffled investors was the inordinate delay in the registration of title deeds in the municipal records.
By the time the registration completed the value of properties would have shot up. The victims of such delay are not only large investors but even owners of small plots.
A man whose property is expropriated or sold for a project would have to wait such a long time for the completion of official formalities that the cash he got as compensation would no more suffice to buy a new house because of the rapid rise in prices.
He said the real estate situation in Makkah is in total chaos. “We do not know through where the proposed railway and metro tracks would pass or the site for the construction of other railway facilities. If only the businessmen and investors had specific information in advance about such locations they would be able to develop such locations, he said.

What's happening around Saudi Arabia

RIYADH: The Kingdom and New Zealand have signed an air services agreement to set a comprehensive regulatory framework for air transport, operating on a safe and organized basis.The deal was signed at the General Authority of Civil Aviation (GACA) he...
RIYADH: Education Minister Ahmed Al-Issa has called on teachers, educators and other officials of his ministry to work hard for the common goal of producing quality graduates. “I urge you to do your level best in transmitting knowledge to the student...
AL-AHSA: Uncoordinated production resources, lack of risk planning, evaluation, non-study of similar projects and poor planning are among the reasons for failure of projects, an expert has said.“Total quality management (TQM) is an integrated scienti...
JEDDAH: The Specialized Criminal Court has issued its verdict against two Saudis for terrorism-related offenses and for supporting extremist groups, a local daily has reported.The court issued a prison sentence of ten and a half years to the first de...
RIYADH: The second phase of the operation on a Polish child for a genetic heart disease was successfully performed at the King Abdulaziz Medical City (KAMC) of the National Guard Health Affairs on Wednesday. On a directive from Custodian of the Two H...
JEDDAH: A new breast cancer treatment improves survival rates by an average 20 percent, with life expectancy lengthened by 29.9 months.This is according to Ahmed Al-Wabari, breast oncology consultant at King Fahd Specialist Hospital in Dammam, who ou...
RIYADH: The projects of Saudi students at the Technical Trainers College (TTC) is being showcased at the German pavilion in the 30th Janadriyah Festival. With the slogan “Welcome to Your Future”, the TTC is participating in the festival with Germany...
JEDDAH: The Ministry of Labor has urged firms to immediately start implementing the 10th phase of the Wage Protection System before it becomes mandatory on March 31.Mohammed Al-Faleh, assistant undersecretary for inspection and development of the wor...
RIYADH: As many as 104 antique items that have come from the Pergamon Museum in Berlin, Germany, have gone on display at the National Museum here. The exhibition coincides the Janadriyah festival for heritage and culture.According to local media, the...
RIYADH: A visiting Kuwaiti delegation has praised Saudi Arabia for collecting and preserving various heritage items at the King Abdul Aziz Historical Center in Riyadh.The delegation, led by Kuwait’s Education Minister Bader Al-Essa, was given a tour...
RIYADH: Road security forces in Madinah apprehended two Asian expats who were caught in possession of a huge amount of money totaling SR1.6 million and talismans.“The two Asians were riding in a Japanese-made car when they were stopped at the Yanbu-...
RIYADH: Good news for the 25,000 British expatriates in the Kingdom, who will get their franchise to participate in the referendum on the UK’s membership of the European Union.In an announcement on Thursday, the British Embassy here said that the Uni...
JEDDAH: Jeddah Municipality, with cooperation of the Check Safety First British company, launched an award of excellence for services in restaurants under the name E-Cristal to support the establishment of best services in restaurants and eatery shop...
JEDDAH: Well-known Indian cricketer Irfan Pathan married Safa Baig, an Indian woman, who was born in Jeddah and raised here by her Hyderabadi parents.The marriage was solemnized at a simple ceremony at the Grand Mosque in Makkah on Wednesday. Only a...
RIYADH: The Ministries of Interior and Islamic Affairs are considering appointing security guards at all the mosques in the Kingdom where Friday prayers are held.The move comes as a precautionary and regulatory measure to protect the mosques from at...

Stay Connected

Facebook