The Saudi Arabian real estate market has yet to see the huge declines so familiar now to the rest of the world — and they would like to keep it that way. In an effort to avoid a real estate disaster — similar to Dubai — Saudi Arabia has decided to limit pre-construction sales. For more information, read the following article from Property Wire.
New rules in Saudi Arabia have banned the promotion and sale of real estate developments that are still at the planning stage.
All advertisements and promotional material in local and foreign media have been outlawed in a set of new rules covering the sale of residential, commercial, office and industrial property.
The ban is part of a series of measures aimed at curbing rampant speculation in the real estate sector and the start of putting in place measures to protect buyers from being exploited.
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The ban also includes marketing and events in the Kingdom or abroad to promote off plan developments unless express permission is granted by a new Property Committee.
The new committee will include representatives from the ministers of Commerce and Industry, Municipal and Rural Affairs, the Saudi Arabian Monetary Agency and the General Commission for Housing. It will be responsible for examining applications for real estate development.
Developers will have to apply to the committee before being able to go ahead with any project and will have to prove it is able to proceed by giving details of technical and financial capabilities for projects.
The committee will also be responsible for drawing up rights to protect consumers from being exploited by real estate developers and brokers. There are also plans to draw up a construction code.
No immediate reaction from the real estate sector was available but the measures are expected to meet with a cautious welcome as the industry in Saudi Arabia has been concerned that it could suffer the kind of boom and bust that has afflicted nearby Dubai where speculation led to a bubble that has now resulted in property prices dropping by up to 50% in some developments.
This article has been reposted from Property Wire. View the article on Property Wire’s international real estate news website here.