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RIYADH: A number of prominent figures in real estate business have urged the authorities to regulate the sector and curb the number of offices mushrooming in various parts of the Kingdom in an extremely disparate manner.
They noted about 70 percent of real estate offices in Riyadh alone are functioning in an unorganized and unsystematic manner. These offices adopt all possible ways to earn huge profit without giving any consideration to the interests of their clients, according to a report in Al-Eqtisadiah business daily.
Ali Fozan Al-Fozan, chairman of the board of directors of Basma Gulf Real Estate Development Company, said municipalities should crack down on these random offices and regulate the sector more tightly.
“The municipality has started shutting down such offices. But the catastrophe is that in such cases, these offices move to other parts. There are about 2,000 random real estate offices in Riyadh alone,” he said, attributing this to the absence of any rules to classify and regulate these offices.
Al-Fozan called for a unified contract with specific provisions to regulate the relationship between realtors and customers in a way protecting interests of both sides.
“The absence of such regulations would undermine the initiative to attract more investments to the booming real estate sector. Strict measures should be taken against the random offices, which are mainly responsible for the unreasonable and exorbitant increase in the prices of properties as well as rent,” he said.
Saleh Al-Amri, a real estate investor, sought the intervention of the Ministry of Commerce and the Council of Saudi Chambers of Commerce and Industry to develop specific criteria and laws aimed at regulating these offices in a way guaranteeing protection of huge investments exceeding SR300 billion in the local real estate market.
Voicing apprehension over the possibility of having an anarchic situation in the real estate market caused by illegal and unorganized real estate offices, Al-Amri stressed the need for protecting the rights of both realtors and tenants.
“Such a situation may lead to the loss of rights of those involved in disputes. This would result in an unreasonable hike in the prices of properties even without factoring the impact of any market conditions such as high demand and low supply. This may also lead to the emergence of new blocs engaging in speculative trade based on baseless rumors that eventually would undermine the stability of the market,” he said.
Al-Amri said the Kingdom’s real estate sector is in dire need of a new regulatory system keeping pace with the latest changes in the market.
“This would help bring about professionalism in the functioning of real estate offices in a way. This would help make it a major supporting arm to promote economic activities in line with the laws and working mechanism prevailing in the sector,” he said while noting that this could be realized through the setting up of a society or authority in order to supervise, regulate, monitor and develop real estate offices in the Kingdom.
They noted about 70 percent of real estate offices in Riyadh alone are functioning in an unorganized and unsystematic manner. These offices adopt all possible ways to earn huge profit without giving any consideration to the interests of their clients, according to a report in Al-Eqtisadiah business daily.
Ali Fozan Al-Fozan, chairman of the board of directors of Basma Gulf Real Estate Development Company, said municipalities should crack down on these random offices and regulate the sector more tightly.
“The municipality has started shutting down such offices. But the catastrophe is that in such cases, these offices move to other parts. There are about 2,000 random real estate offices in Riyadh alone,” he said, attributing this to the absence of any rules to classify and regulate these offices.
Al-Fozan called for a unified contract with specific provisions to regulate the relationship between realtors and customers in a way protecting interests of both sides.
“The absence of such regulations would undermine the initiative to attract more investments to the booming real estate sector. Strict measures should be taken against the random offices, which are mainly responsible for the unreasonable and exorbitant increase in the prices of properties as well as rent,” he said.
Saleh Al-Amri, a real estate investor, sought the intervention of the Ministry of Commerce and the Council of Saudi Chambers of Commerce and Industry to develop specific criteria and laws aimed at regulating these offices in a way guaranteeing protection of huge investments exceeding SR300 billion in the local real estate market.
Voicing apprehension over the possibility of having an anarchic situation in the real estate market caused by illegal and unorganized real estate offices, Al-Amri stressed the need for protecting the rights of both realtors and tenants.
“Such a situation may lead to the loss of rights of those involved in disputes. This would result in an unreasonable hike in the prices of properties even without factoring the impact of any market conditions such as high demand and low supply. This may also lead to the emergence of new blocs engaging in speculative trade based on baseless rumors that eventually would undermine the stability of the market,” he said.
Al-Amri said the Kingdom’s real estate sector is in dire need of a new regulatory system keeping pace with the latest changes in the market.
“This would help bring about professionalism in the functioning of real estate offices in a way. This would help make it a major supporting arm to promote economic activities in line with the laws and working mechanism prevailing in the sector,” he said while noting that this could be realized through the setting up of a society or authority in order to supervise, regulate, monitor and develop real estate offices in the Kingdom.
