How Are New Legal Frameworks Empowering Creative Investing?
Innovation is the driving force that keeps markets moving forward. Some of these new innovations allow individuals to invest in real estate without the hefty price tag associated with buying property, such as REITs, crowd funding and fractional partnerships.
“There is an emergence of REITs in the region, especially in Saudi Arabia,” said Racha Alkhawaja, CDO of Equitativa Group. “There is definitely an appetite from investors to look at alternative investment products and target other sectors in the real estate market besides the conventional sectors in order to benefit from better yield.”
REITs are gaining traction, not just amongst local investors, but also international ones. With changing laws and regulations and new opportunities, the Middle East wants to attract new investors into the region. “Dubai originally attracted high value investors. Investors that bought high value plots and high value real estate. I think what the FDI is going to do is reach a wider range of consumers; people who are looking for a second home, people who are looking for an alternative investment, or people who want to retire in this part of the world,” said Abdulla Galadari, Senior Partner at Galadari Advocates and Legal Consultants. “The FDI initiative is an excellent initiative. It will attract a lot of new investors and I think it will create a lot of stability and stop fluctuation in the valuation of the real estate market.”
The uptake of new funding initiatives from the government might seem like a slow process, but they want to see results and ensure it is safe for investors before jumping headfirst into something, explained Dr. Mahmoud Alburai, Senior advisor in
RERA. They want to make it not only easier for people to invest but more secure as well.
Saudi Arabia is a particularly appealing market at the moment. With all the changes that the Kingdom has undergone in the last couple of years there are ample opportunities, not just in real estate, but across industries. Makkah and Medina offer a unique opportunity for Muslims to invest. According to Eng. Sami Abdulaziz Al Makhdoub, CEO of Knowledge Economic City there are currently only eight million visas being issued per year for tourists to visit Makkah and Medina. This number is expected to increase to 30 million visas in 10 years from now.
Inflation is making it difficult for multiple middle and low-income families to purchase their first property. According to Siddiq Farid, CEO of Smart Crowd, homeownership will continue to deteriorate across the world because of affordability and negative experiences.
Introducing blockchain into the real estate market makes it more transparent and secure for all parties involved. Having the government regulate creative investments adds an extra layer of security. While there will always be some form of risk involved in any investment, some are safer than others. They are each unique in their own way and investors need to find something that suits them. The most important thing is to educate yourself on the options available before making any decisions.
“Dubai originally attracted high value investors. Investors that bought high value plots and high value real estate. I think what the FDI is going to do is reach a wider range of consumers; people who are looking for a second home, people who are looking for an alternative investment, or people who want to retire in this part of the world.” - Abdulla Galadari
ENG. SAMI ABDULAZIZ AL MAKHDOUB CEO Knowledge Economic City
DR. MAHMOUD ALBURAI Senior Advisor in RERA
ABDULLA GALADARI Senior Partner Galadari Advocates & Legal Consultants
CDO Equitativa Group
White & Case
SIDDIQ FARID CEO Smart Crowd