More Residential and Administrative Units in Competitive Auctions
Mr. Mohamed Sharif Mohamed Hamad Al-Shirawi, Chairman of the Board of Directors and CEO of Al-Shirawi Real Estate Development Group, stated that the company has entered into contracts with several real estate development companies in the region. Currently, the company is representing them commercially, which allows us to market their properties of various types, sizes, and locations. Through our participation in this exhibition, we are offering citizens and residents interested in foreign investments a variety of options, especially for those interested in investing in the Egyptian real estate sector, where we represent several prestigious companies with outstanding projects.
Responding to a question about the trends in the local and international real estate sectors, especially in the past two years, Al-Shirawi added: “Unfortunately, this sector has not been dealt with scientifically, especially since real estate mortgages were one of the reasons for the collapse and bankruptcy of many banks and financial institutions worldwide. This means that any country must have a strategic vision and a comprehensive plan that takes into account current and future needs and studies the impact of its operations on the local, Gulf, and international economies. As you know, the past eight years witnessed significant development in various fields and sectors in Qatar, accompanied by an increase in the country’s population, which prompted many Qatari real estate developers and investors to invest in this sector and contribute to the country’s progress. Moreover, there was a significant effort to control inflation rates. Some governments succeeded in reducing inflation rates in their countries, but at the same time, it created other problems as there were no ready solutions for its application. It is obvious that every sector, regardless of its activity, goes through periods of recovery and recession. Based on the supply and demand situation we have witnessed in the Qatari real estate market over the past two years and continue to experience in the current period, we see that the real estate market has leaned towards recession. This is primarily due to an increase in the number of residential and administrative units, surpassing the demand during the same period. Consequently, some areas in the country have seen price stability, while others have experienced significant price corrections after reaching record price levels that some considered inflated. However, it is certain that the current supply of residential units far exceeds the demand, and if this situation continues at the same pace, this sector will experience negative effects that will affect other sectors as well.”
He added, “Therefore, there is a need to reconsider the strategy of flooding the market to reduce prices and include effective positive solutions to address any side effects on the real estate sector and other sectors. Perhaps it would be better to consider the issue from all its dimensions to reach effective solutions.”
Regarding the challenges facing the real estate sector, Al-Shirawi believes that the sector currently faces several challenges, including the increase in the traditional residential units available for rent, allowing tenants to choose from various levels of luxury offered by these units. This raises the competitiveness of some units over others, with a tendency towards larger, more luxurious units offered at reasonable prices. Additionally, the construction of more residential and administrative units currently underway in the market will contribute to increased competition among property owners, leading to a new wave of correction and price adjustment.
He stated, “Today, real estate developers need to move away from the traditional investment in this sector and shift towards real estate development and investment that can address the gaps in the real estate market. If we move away from the residential and administrative unit segment, we find a shortage in other types of real estate units, such as tourist and commercial units. This provides opportunities for real estate developers to invest and develop to meet the needs of different segments in this sector. For example, there is a scarcity of small and medium-sized commercial units and showrooms, which still experience significant price inflation even during price corrections in some residential and administrative units. Additionally, there are numerous vacant residential and administrative units that do not generate any income for their owners, making it difficult for them to meet their financial obligations. Moreover, there are technical and engineering challenges related to designs that do not consider the needs of car users and parking requirements.”
Responding to a question about the Shura Council’s approval of the Real Estate Brokerage Business Regulation Law (Mediation) and the ban on conducting brokerage activities without obtaining prior licenses, Al-Shirawi stated: “The Qatari real estate market was in dire need of a law that regulates the work of real estate brokers and provides a supervisory framework for brokerage offices and their activities. Implementing the Real Estate Brokerage Business Regulation Law will play an active role in stabilizing the local real estate market. It will also eliminate the random speculations of brokers, which lacked regulations to govern and monitor their actions. Moreover, it will lead to the disappearance of unexperienced brokers who lack the necessary knowledge and skills for brokerage and real estate mediation. Working in the real estate brokerage field requires specific skills, continuous monitoring of land and property prices, and demand analysis. It also necessitates a continuous study and understanding of economic and political factors surrounding the market. If we look closely at some practitioners in this profession today, we find that they entered this profession due to the lucrative returns compared to their original professions. Some of them were teachers, accountants, or had no previous profession and acquired it through their parents or relatives. They lack the complete knowledge and qualifications necessary for practicing this profession. There is no doubt that implementing the law will protect all parties involved in the real estate brokerage profession, which is gaining increasing importance in line with the wise leadership of the country and its support for the needs of the coming period.”
Source: Al Sharq newspaper