As part of the coverage about the main challenges of construction sector in Palestine, Middle East Business News & Magazine, interviewed Eng. Monif Treish, the CEO of Amaar Group:
1. How do you evaluate the construction sector in Palestine? Why does it continue to grow although Palestine suffers regularly from economic problems?
In general, the construction sector in Palestine has experienced growth during the past few years. I’d say there are three major reasons for this continuing growth:
- An increase in demand due to the natural growth of our population, which is young in age, so the number of new households coming onto the market is above the average of other countries. There is also latent demand from previous years, where Israeli occupation restrictions were enforced. The tendency is for the population to improve their living conditions by moving into housing units that are suitable for today’s lifestyle.
- The easing of mortgage policies, as adopted by our banks, allowing more households to qualify for housing loans.
- Real estate is considered the safest investment and people are willing to invest in housing.
2. What are the main challenges in construction at the planning level, and local government level?
Most of the planning schemes in urban cities need to be upgraded to allow for vertical expansion, and there is an urgent requirement for our planning laws to be amended.
Investment by local government is required into improving and upgrading the infrastructure, so that it can serve the increase in construction within the existing urban area. There is a need to prepare master plans for the outskirts of urban areas so as to provide the market with low cost developed land that is suitable for construction.
Local government should offer incentives to developers who provide housing units that are affordable to lower middle class families who are in need of housing.
3. Some reports say that there are 5,000 empty apartments in Ramallah, yet we see lots of new buildings going up, both commercial and housing. How do you explain this? Are we experiencing a ‘construction bubble’?
I think there is still demand for housing units that are within the financial ability of most of households. Currently, most of the empty units are owned by people who live abroad or who’ve bought units for investment purposes. Despite what is being said about a ‘construction bubble’ I think our mortgage policy is still very conservative and has adequate safeguards to protect all sides. I also think that market forces will correct the situation.
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