GGI is set to divert from the agriculture business to the intricate world of real estate. Al-Rasheed said that most entrepreneurs in the Kingdom as well as in other countries mortgage their houses to generate funds if they hit upon a business idea.

Arab News

Tuesday, 13, February, 2007 (25, Muharram, 1428)

GGI Seeks Changes in Real Estate Industry Regulations

Rodolfo C. Estimo Jr.,

RIYADH, 13 February 2007 — The local real estate industry has bright prospects but the existing regulatory rule has to be changed or amended, according to Turki Faisal Al-Rasheed, CEO of Golden Grass, Inc. (GGI) which is ranked among the Kingdom’s top 100 companies.

“The real estate industry in the Kingdom has been on the uptrend. In fact, it’s a huge market with bright prospects. We’re expecting a $50 billion worth of real estate development annually for the next 20 years but this would materialize only if the government has to change or amend the existing regulatory rule,” he told Arab News.

GGI is set to divert from the agriculture business to the intricate world of real estate. Al-Rasheed said that most entrepreneurs in the Kingdom as well as in other countries mortgage their houses to generate funds if they hit upon a business idea. In this connection, he said, there’s a problem in Saudi Arabia because if a Saudi has a lien on his house, he cannot have a second or even a third mortgage on his property, adding that to purchase a second or third mortgage on a house is important to generate cash for business expansion.

“ At present, there are 650,000 housing units being constructed by the government. A Saudi national is allowed to borrow up to SR300,000 to avail of these houses for his family but he cannot sell or mortgage the property to raise capital for business expansion because of the existing regulation,” he said. He added that the government should remove the barriers to business growth and allow the sale of a property with a lien as well as allow a second or third mortgage to a property with a first lien so that the owner can generate cash for business growth.

Asked if something is being done, or has been done, to remove the barriers he was referring to, he said, “Yes. We’re thankful that the government has taken a positive view of our complaints. The Shoura Council said that it will form a government organization similar to the Supreme Commission for Tourism in the tourism sector to solve the problems of the local real estate industry.”

http://www.arabnews.com/?page=6§ion=0&article=92104&d=13&m=2&y=2007


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