Experts fear overheating in region's property market
By Suzanne Fenton, Staff Reporter
Published: March 20, 2008, 23:54
Dubai: The property market in the region is in danger of becoming overstretched, industry officials, whose remarks were given on condition of anonymity, said at a recent conference in Dubai.
"If the costs get too high, Dubai won't be so attractive," the chief executive of a real estate project development in Oman said.
Dubai's real estate transactions were worth $18 billion in 2006, and current estimates show a staggering $158 billion is invested in the sector just in Dubai.
A Financial Times survey has said Dubai is 'at the cutting edge' of world property markets, with average property values rocketing by 150 per cent in the last two years. In contrast, the UK's property value increased by 240 per cent over ten years.
A UAE-based developer said, "There's a lot of pent-up capital looking closely at this region, but returns will be crushed based on escalating costs."
Over the last two years, Dubai has seen rental costs for premium office space more than double, with prices hitting $1,172 per square metre in some cases. In 2005, this figure was about $538.
The main driver behind Dubai's property boom is the ever-increasing population, expected to reach 1.9 million in 2010. Low-cost property, costing Dh500 per square foot, is in high demand, but owing to soaring costs of materials, investment in this sector is losing its appeal.
Soaring construction costs are threatening many projects into being delayed, which is a concern to investors and developers alike.
Some developers are even buying back their own stock as they can't afford to continue construction. A Dubai-based developer agreed that "in the last three months, there has been a marked increase in partly finished buildings being sold off."
A managing director for an international consultancy firm said, "The problem in Dubai is that there are a lot of inexperienced developers, and they are building too much, too quickly and it just can't be sustained."
Monday, March 24, 2008
AL ATTIYAH SAYS BAHRAIN WILL BENEFIT MOST FROM THE GCC COMMON MARKET
AL ATTIYAH SAYS BAHRAIN WILL BENEFIT MOST FROM THE GCC COMMON MARKET
date: 23 03, 2008
MANAMA, MARCH 23, (BNA)--BAHRAIN WILL BE PARTICULARLY THE BIGGEST BENEFICIARY OF ALL THE GCC COUNTRIES FROM THE LAUNCH OF THE GCC COMMON MARKET THANKS TO ITS OPEN ECONOMY, EXPERIENCE AND PASSED LEGISLATION, GCC SECRETARY GENERAL ABDULRAHMAN BIN HAMAD AL ATTIYAH AFFIRMED TODAY IN A SPEECH GIVEN AT A MEETING HELD BY BAHRAIN CHAMBER OF COMMERCE AND INDUSTRY (BCCI) ON THE COMMON MARKET.
HE URGED TO SPEED UP LEGISLATION IN THE GCC COUNTRIES TO GIVE A PUSH TO THE GCC COMMON MARKET, EXPRESSING HOPE TO ACHIEVE A MONETARY UNION AND THE COMMON GCC CURRENCY IN LINE WITH THE RECOMMENDATIONS OF 2001 GCC SUMMIT IN MUSCAT AND THE LATEST SUMMIT IN DOHA.
AL ATTIYAH UNDERLINED KUWAITS COMMITMENT TO THE MONETARY UNION PROJECT WHILE OMAN, HE SAID, WOULD JOIN WHEN APPROPRIATE ACCORDING TO ITS ECONOMIC SITUATION.
HE ALSO CALLED FOR TRUE PARTNERSHIP BETWEEN THE GCC SECRETARIAT GENERAL AND THE CHAMBERS OF COMMERCE AND INDUSTRY IN THE GCC COUNTRIES TO ACTIVATE THE GCC COMMON MARKET AND TRANSLATE IT INTO A REALITY.
ON HIS PART, MINISTER OF INDUSTRY AND COMMERCE DR.
HASAN ABDULLAH FAKHRO STRESSED IN A SPEECH, DELIVERED ON HIS BEHALF BY UNDERSECRETARY FOR COMMERCIAL AFFAIRS DR.
ABDULLAH AL MANSOUR, THE KEY ROLE PLAYED BY THE PRIVATE SECTOR IN THE ECONOMIC AND SOCIAL DEVELOPMENT PROCESS TAKING PLACE IN BAHRAIN AND THE GCC STATES AT LARGE, UNDERLINING THE NEED TO INVOLVE THIS VITAL SECTOR IN THE ECONOMIC DECISION-MAKING PROCESS, NOTABLY AFTER THE LAUNCH OF THE GCC COMMON MARKET.
THE MINISTER HIGHLIGHTED THE MULTIPLE ECONOMIC, COMMERCIAL AND INVESTMENT OPPORTUNITIES TO BE GENERATED BY THE GCC COMMON MARKET FOR ESTABLISHMENTS AND INDIVIDUALS THANKS TO A FREE COMMODITY EXCHANGE, FREELANCE EXCHANGE OF SERVICES, EASY CAPITAL TRANSFER AND LABOUR FORCE MOBILITY.
DR.
FAKHRO URGED THE PRIVATE SECTOR TO ENHANCE ITS PARTICIPATION IN THE DEVELOPMENT PROCESS IN THE COMING PHASE AND EXPAND ITS INVESTMENTS IN ALL FIELDS.
WITHIN THE SAME CONTEXT, CHAIRMAN OF THE UNION OF GCC CHAMBERS OF COMMERCE DR.
ISSAM ABDULLAH FAKHRO CALLED ON THE GOVERNMENT AND PRIVATE SECTORS TO JOIN EFFORTS IN ACTIVATING THE RESOLUTIONS ISSUED BY THE GCC SUPREME COUNCIL WHICH SEEK TO ACHIEVE FULL GCC ECONOMIC CITIZENSHIP AND GET RID OF BUREAUCRACY WHICH MAY UNDERMINE THE COMMON MARKET AND IMPAIR ITS IMPLEMENTATION MECHANISMS.
HE STRESSED THE IMPORTANCE OF EFFECTIVE PARTNERSHIP BETWEEN THE GCC CHAMBERS OF COMMERCE AND GOVERNMENTS THROUGH THE EFFORTS OF THE MINISTERIAL AND TECHNICAL COMMITTEES.FAKHRO SAID THAT THE GCC HAS TAKEN A MAJOR STEP IN THE TRACK OF ITS ECONOMIC PROGRESS BY LAUNCHING THE JOINT MARKET.
HE LOOKED FORWARD TO REACHING COMPLETE ECONOMIC UNITY BY ISSUING A UNIFIED CURRENCY.
FACTORS CONTRIBUTING TO THE SUCCESS OF THE CURRENCY ARE NOW AVAILABLE MORE THAN ANY OTHER TIME AFTER THE LAUNCH OF THE JOINT MARKET, HE SAID.
FAKHRO POINTED OUT TO THE IMPORTANCE OF LOOKING AT THE JOINT GCC MARKET AS THE CORE OF A JOINT ARAB MARKET.
ON HIS PART, FEDERATION OF GCC CHAMBERS OF COMMERCE SECRETARY GENERAL ABDUL RAHEEM NAQI OUTLINED SOME OF THE INDICATORS RELATED TO THE LIBERATION OF PRODUCTS INVESTMENTS AMONG GCC STATES AND THE ROLE THAT THE JOINT MARKET COULD HAVE IN INCREASING THE EXCHANGE OF TRADE AND INVESTMENT AMONG THEM.
THE NUMBER OF JOINT GCC PROJECTS REACHED AROUND 1,000, HE SAID, NOTING THAT THE SUM OF THEIR CAPITAL DID NOT EXCEED USD205 BILLION IN 2005.
ON THE OTHER HAND, JOINT-STOCK COMPANIES ALLOWING GULF CITIZENS TO TRADE IN THEIR SHARES REACHED 524 OUT OF A TOTAL OF 1,000 COMPANIES, HE SAID.
ACCORDING TO NAQI, THERE ARE ONLY 16 BRANCHES OF GULF BANKS IN COUNCIL MEMBER COUNTRIES.
THE NUMBER OF GCC CITIZENS OWNING PROPERTY IN OTHER GCC STATES DID NOT EXCEED 34,000, HE NOTED.
THE SIZE OF TRADE EXCHANGE AMONG GCC COUNTRIES ONLY REACHED 10 PER CENT OF THE TOTAL OF EXCHANGE IN THE AREA, HE ADDED.
WITH THE JOINT MARKET, HE SAID, THE RATE IS EXPECTED TO MORE THAN DOUBLE, ACCORDING TO ESTIMATIONS.
A SIGNIFICANT SHARE OF GCC INVESTMENTS ABROAD, WORTH AROUND USD 1 TRILLION, COULD ALSO BE FORWARDED TO THE ECONOMIES OF COUNCIL COUNTRIES INSTEAD, HE SAID.
THE MEETING ALSO COVERED VARIOUS ASPECTS RELATED TO THE LAUNCH OF THE GCC JOINT MARKET.
IT DISCUSSED THE MEANS OF ACHIEVING GCC ECONOMIC CITIZENSHIP THROUGH THE POTENTIALS MADE AVAILABLE BY THE MARKET.
THIS COULD BE DONE BY FAMILIARIZING BUSINESSMEN AND VARIOUS ECONOMIC SECTORS WITH THE RULES AND REGULATIONS RELATED TO GCC ECONOMIC CITIZENSHIP.
NTQ/MT 23-MAR-2008 19:18
date: 23 03, 2008
MANAMA, MARCH 23, (BNA)--BAHRAIN WILL BE PARTICULARLY THE BIGGEST BENEFICIARY OF ALL THE GCC COUNTRIES FROM THE LAUNCH OF THE GCC COMMON MARKET THANKS TO ITS OPEN ECONOMY, EXPERIENCE AND PASSED LEGISLATION, GCC SECRETARY GENERAL ABDULRAHMAN BIN HAMAD AL ATTIYAH AFFIRMED TODAY IN A SPEECH GIVEN AT A MEETING HELD BY BAHRAIN CHAMBER OF COMMERCE AND INDUSTRY (BCCI) ON THE COMMON MARKET.
HE URGED TO SPEED UP LEGISLATION IN THE GCC COUNTRIES TO GIVE A PUSH TO THE GCC COMMON MARKET, EXPRESSING HOPE TO ACHIEVE A MONETARY UNION AND THE COMMON GCC CURRENCY IN LINE WITH THE RECOMMENDATIONS OF 2001 GCC SUMMIT IN MUSCAT AND THE LATEST SUMMIT IN DOHA.
AL ATTIYAH UNDERLINED KUWAITS COMMITMENT TO THE MONETARY UNION PROJECT WHILE OMAN, HE SAID, WOULD JOIN WHEN APPROPRIATE ACCORDING TO ITS ECONOMIC SITUATION.
HE ALSO CALLED FOR TRUE PARTNERSHIP BETWEEN THE GCC SECRETARIAT GENERAL AND THE CHAMBERS OF COMMERCE AND INDUSTRY IN THE GCC COUNTRIES TO ACTIVATE THE GCC COMMON MARKET AND TRANSLATE IT INTO A REALITY.
ON HIS PART, MINISTER OF INDUSTRY AND COMMERCE DR.
HASAN ABDULLAH FAKHRO STRESSED IN A SPEECH, DELIVERED ON HIS BEHALF BY UNDERSECRETARY FOR COMMERCIAL AFFAIRS DR.
ABDULLAH AL MANSOUR, THE KEY ROLE PLAYED BY THE PRIVATE SECTOR IN THE ECONOMIC AND SOCIAL DEVELOPMENT PROCESS TAKING PLACE IN BAHRAIN AND THE GCC STATES AT LARGE, UNDERLINING THE NEED TO INVOLVE THIS VITAL SECTOR IN THE ECONOMIC DECISION-MAKING PROCESS, NOTABLY AFTER THE LAUNCH OF THE GCC COMMON MARKET.
THE MINISTER HIGHLIGHTED THE MULTIPLE ECONOMIC, COMMERCIAL AND INVESTMENT OPPORTUNITIES TO BE GENERATED BY THE GCC COMMON MARKET FOR ESTABLISHMENTS AND INDIVIDUALS THANKS TO A FREE COMMODITY EXCHANGE, FREELANCE EXCHANGE OF SERVICES, EASY CAPITAL TRANSFER AND LABOUR FORCE MOBILITY.
DR.
FAKHRO URGED THE PRIVATE SECTOR TO ENHANCE ITS PARTICIPATION IN THE DEVELOPMENT PROCESS IN THE COMING PHASE AND EXPAND ITS INVESTMENTS IN ALL FIELDS.
WITHIN THE SAME CONTEXT, CHAIRMAN OF THE UNION OF GCC CHAMBERS OF COMMERCE DR.
ISSAM ABDULLAH FAKHRO CALLED ON THE GOVERNMENT AND PRIVATE SECTORS TO JOIN EFFORTS IN ACTIVATING THE RESOLUTIONS ISSUED BY THE GCC SUPREME COUNCIL WHICH SEEK TO ACHIEVE FULL GCC ECONOMIC CITIZENSHIP AND GET RID OF BUREAUCRACY WHICH MAY UNDERMINE THE COMMON MARKET AND IMPAIR ITS IMPLEMENTATION MECHANISMS.
HE STRESSED THE IMPORTANCE OF EFFECTIVE PARTNERSHIP BETWEEN THE GCC CHAMBERS OF COMMERCE AND GOVERNMENTS THROUGH THE EFFORTS OF THE MINISTERIAL AND TECHNICAL COMMITTEES.FAKHRO SAID THAT THE GCC HAS TAKEN A MAJOR STEP IN THE TRACK OF ITS ECONOMIC PROGRESS BY LAUNCHING THE JOINT MARKET.
HE LOOKED FORWARD TO REACHING COMPLETE ECONOMIC UNITY BY ISSUING A UNIFIED CURRENCY.
FACTORS CONTRIBUTING TO THE SUCCESS OF THE CURRENCY ARE NOW AVAILABLE MORE THAN ANY OTHER TIME AFTER THE LAUNCH OF THE JOINT MARKET, HE SAID.
FAKHRO POINTED OUT TO THE IMPORTANCE OF LOOKING AT THE JOINT GCC MARKET AS THE CORE OF A JOINT ARAB MARKET.
ON HIS PART, FEDERATION OF GCC CHAMBERS OF COMMERCE SECRETARY GENERAL ABDUL RAHEEM NAQI OUTLINED SOME OF THE INDICATORS RELATED TO THE LIBERATION OF PRODUCTS INVESTMENTS AMONG GCC STATES AND THE ROLE THAT THE JOINT MARKET COULD HAVE IN INCREASING THE EXCHANGE OF TRADE AND INVESTMENT AMONG THEM.
THE NUMBER OF JOINT GCC PROJECTS REACHED AROUND 1,000, HE SAID, NOTING THAT THE SUM OF THEIR CAPITAL DID NOT EXCEED USD205 BILLION IN 2005.
ON THE OTHER HAND, JOINT-STOCK COMPANIES ALLOWING GULF CITIZENS TO TRADE IN THEIR SHARES REACHED 524 OUT OF A TOTAL OF 1,000 COMPANIES, HE SAID.
ACCORDING TO NAQI, THERE ARE ONLY 16 BRANCHES OF GULF BANKS IN COUNCIL MEMBER COUNTRIES.
THE NUMBER OF GCC CITIZENS OWNING PROPERTY IN OTHER GCC STATES DID NOT EXCEED 34,000, HE NOTED.
THE SIZE OF TRADE EXCHANGE AMONG GCC COUNTRIES ONLY REACHED 10 PER CENT OF THE TOTAL OF EXCHANGE IN THE AREA, HE ADDED.
WITH THE JOINT MARKET, HE SAID, THE RATE IS EXPECTED TO MORE THAN DOUBLE, ACCORDING TO ESTIMATIONS.
A SIGNIFICANT SHARE OF GCC INVESTMENTS ABROAD, WORTH AROUND USD 1 TRILLION, COULD ALSO BE FORWARDED TO THE ECONOMIES OF COUNCIL COUNTRIES INSTEAD, HE SAID.
THE MEETING ALSO COVERED VARIOUS ASPECTS RELATED TO THE LAUNCH OF THE GCC JOINT MARKET.
IT DISCUSSED THE MEANS OF ACHIEVING GCC ECONOMIC CITIZENSHIP THROUGH THE POTENTIALS MADE AVAILABLE BY THE MARKET.
THIS COULD BE DONE BY FAMILIARIZING BUSINESSMEN AND VARIOUS ECONOMIC SECTORS WITH THE RULES AND REGULATIONS RELATED TO GCC ECONOMIC CITIZENSHIP.
NTQ/MT 23-MAR-2008 19:18
Rise in food prices puts pressure on fiscal policy
Rise in food prices puts pressure on fiscal policy
By Nadim Kawach on Friday, March 21 , 2008
A surge in global food prices has put pressure on the fiscal balance of Gulf oil producers and complicated their efforts to stem inflation given their heavy reliance on farm imports, according to official data.
Without heavy government subsidies, higher food prices will remain a key factor in soaring inflation rates in the Gulf Co-operation Council (GCC) along with a surge in rents, high public spending and excessive domestic liquidity.
Official figures showed food prices have jumped by four to 10 per cent in the GCC over the past three years mainly as a result of soaring farm costs in many countries that are considered a key source for GCC food supplies.
“Over the past year, prices of some food products have risen substantially. For many economies, food represents a significant share of export receipts or import payments. Thus, higher food prices can have a significant impact on a country’s net trade balances,” the International Monetary Fund said.
It said some food-exporting countries in the Western Hemisphere – such as Argentina, Bolivia, and Chile – and in southern Africa – such as South Africa, Namibia, and Swaziland – have benefited from higher food prices since 2002.
However, many of the poorer regions of Africa and a number of countries in Asia as well as in the Middle East are net losers, the IMF said in a study.
Higher global food prices put upward pressure on the cost of living, both directly and through their potential impact on non-food prices. Average domestic food price inflation [defined as the purchasing-power-parity weighted aggregate of an individual country’s domestic food price inflation] rose to about 4.5 per cent in the first four months of 2007 from about three per cent over the same period in 2006. The figure is more than nine per cent for developing countries.
Experts said the surge in food prices constituted a major obstacle for the GCC’s efforts to tackle inflation as farm imports account for a large part of the group’s total imports. The foodstuff’s relative weight in the consumer price index (CPI) in some members is as high as 25 per cent, which means any increase in food prices will have a heavy impact on total inflation.
In Saudi Arabia, by far the largest and most populous GCC member, food prices surged by 5.6 per cent in 2006 and 7.1 per cent in 2007.
The increase, along with a steady rise in rents and prices of other items, increased the Kingdom’s inflation rate to its highest annual average of 4.1 per cent in 2007.
The continuous increase in food prices in Saudi Arabia, the world’s top oil exporter, has given rise to smuggling of some foodstuffs and manipulation by traders to influence prices and net higher profits.
On Wednesday, the official media reported that Saudi Arabia’s new Trade Minister Abdullah Zainal formed a committee to study the price increase after meeting representatives of food traders.
He said the committee would consider measures to halt smuggling and manipulation and curb price increases. In the UAE, the largest importer in the Middle East, food prices soared by 5.5 per cent in 2006 and eight per cent in 2007, according to the Central Bank.
Economists said this surge was one of the main causes of inflation along with high rents as foodstuff and beverage is the second largest component of the country’s consumer price index, with a relative weight of 14.4 per cent.
Central Bank figures in other GCC members also showed sharp increases in food prices, which shot up by at least seven per cent in Qatar last year, 6.8 per cent in Kuwait and 10.8 per cent in Oman.
“There are a host of factors responsible for the inflation problem in the GCC and the surge in food prices is one of the main factors,” a UAE bank manager said.
“While member states can deal with the other factors, including high public spending, excess liquidity and a surge in local rents, I do not see how they will deal with the food price problem as it is an international problem unless of course they will introduce heavy subsidies. But as you know, subsidies are only a temporary solution and they will also be a big burden on the budget. The main problem is that the GCC countries receive most of their food through imports.” GCC states are among the largest food importers in the world given their poor farm potential due to their desert nature.
The bulk of their food imports come from outside the Arab region, including the United States and other countries.
Official Arab figures showed the GCC’s combined farm imports peaked at around $46.29 billion (Dh169.8bn) during 2005-2007.
They accounted for around 45 per cent of the total Arab food import value of $102bn although the population of the six members of around 35 million does not exceed 11 per cent of the total Arab population. A breakdown showed Saudi Arabia was the largest Arab food importer, with a value of $26bn during 2005-2007. Imports by the UAE totalled $9.3bn, while they stood at $4.5bn in Oman, $4.3bn in Kuwait, $1.4bn in Bahrain and around $790 million in Qatar.
http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=4210
By Nadim Kawach on Friday, March 21 , 2008
A surge in global food prices has put pressure on the fiscal balance of Gulf oil producers and complicated their efforts to stem inflation given their heavy reliance on farm imports, according to official data.
Without heavy government subsidies, higher food prices will remain a key factor in soaring inflation rates in the Gulf Co-operation Council (GCC) along with a surge in rents, high public spending and excessive domestic liquidity.
Official figures showed food prices have jumped by four to 10 per cent in the GCC over the past three years mainly as a result of soaring farm costs in many countries that are considered a key source for GCC food supplies.
“Over the past year, prices of some food products have risen substantially. For many economies, food represents a significant share of export receipts or import payments. Thus, higher food prices can have a significant impact on a country’s net trade balances,” the International Monetary Fund said.
It said some food-exporting countries in the Western Hemisphere – such as Argentina, Bolivia, and Chile – and in southern Africa – such as South Africa, Namibia, and Swaziland – have benefited from higher food prices since 2002.
However, many of the poorer regions of Africa and a number of countries in Asia as well as in the Middle East are net losers, the IMF said in a study.
Higher global food prices put upward pressure on the cost of living, both directly and through their potential impact on non-food prices. Average domestic food price inflation [defined as the purchasing-power-parity weighted aggregate of an individual country’s domestic food price inflation] rose to about 4.5 per cent in the first four months of 2007 from about three per cent over the same period in 2006. The figure is more than nine per cent for developing countries.
Experts said the surge in food prices constituted a major obstacle for the GCC’s efforts to tackle inflation as farm imports account for a large part of the group’s total imports. The foodstuff’s relative weight in the consumer price index (CPI) in some members is as high as 25 per cent, which means any increase in food prices will have a heavy impact on total inflation.
In Saudi Arabia, by far the largest and most populous GCC member, food prices surged by 5.6 per cent in 2006 and 7.1 per cent in 2007.
The increase, along with a steady rise in rents and prices of other items, increased the Kingdom’s inflation rate to its highest annual average of 4.1 per cent in 2007.
The continuous increase in food prices in Saudi Arabia, the world’s top oil exporter, has given rise to smuggling of some foodstuffs and manipulation by traders to influence prices and net higher profits.
On Wednesday, the official media reported that Saudi Arabia’s new Trade Minister Abdullah Zainal formed a committee to study the price increase after meeting representatives of food traders.
He said the committee would consider measures to halt smuggling and manipulation and curb price increases. In the UAE, the largest importer in the Middle East, food prices soared by 5.5 per cent in 2006 and eight per cent in 2007, according to the Central Bank.
Economists said this surge was one of the main causes of inflation along with high rents as foodstuff and beverage is the second largest component of the country’s consumer price index, with a relative weight of 14.4 per cent.
Central Bank figures in other GCC members also showed sharp increases in food prices, which shot up by at least seven per cent in Qatar last year, 6.8 per cent in Kuwait and 10.8 per cent in Oman.
“There are a host of factors responsible for the inflation problem in the GCC and the surge in food prices is one of the main factors,” a UAE bank manager said.
“While member states can deal with the other factors, including high public spending, excess liquidity and a surge in local rents, I do not see how they will deal with the food price problem as it is an international problem unless of course they will introduce heavy subsidies. But as you know, subsidies are only a temporary solution and they will also be a big burden on the budget. The main problem is that the GCC countries receive most of their food through imports.” GCC states are among the largest food importers in the world given their poor farm potential due to their desert nature.
The bulk of their food imports come from outside the Arab region, including the United States and other countries.
Official Arab figures showed the GCC’s combined farm imports peaked at around $46.29 billion (Dh169.8bn) during 2005-2007.
They accounted for around 45 per cent of the total Arab food import value of $102bn although the population of the six members of around 35 million does not exceed 11 per cent of the total Arab population. A breakdown showed Saudi Arabia was the largest Arab food importer, with a value of $26bn during 2005-2007. Imports by the UAE totalled $9.3bn, while they stood at $4.5bn in Oman, $4.3bn in Kuwait, $1.4bn in Bahrain and around $790 million in Qatar.
http://www.business24-7.ae/cs/article_show_mainh1_story.aspx?HeadlineID=4210
Subscribe to:
Comments (Atom)
