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00:00This program is brought to you by ADFX.
00:23The time when real estate is the biggest investment a person can make in his life.
00:29The question today is, is real estate still the safest way to build wealth?
00:36Of course, since we were young, we have always heard that owning a house is the cornerstone of financial stability.
00:43When you grow up, buy a house.
00:46This is a phrase that has been repeated by generations.
00:48But in today's world, there are rapid changes and successive economic crises.
00:54Is it possible for this advice to be true?
00:57While real estate investment attracts investors with promises of security and rewards,
01:03there are many factors that we should take into account.
01:08All of these factors play a major role in shaping the future of real estate investment.
01:17So how can families today make a decision that can contribute to the protection of investments
01:25and strengthen their investment reserves?
01:28This time may be suitable for buying real estate or waiting for better opportunities.
01:35Of course, this is one of the most important issues in the financial world.
01:40I am happy to have with me today in the studio, Aqba Abdelkarim, CEO of OMG Projects.
01:46Aqba, thank you for being with us today.
01:48Thank you.
01:49We have known you for a long time in the real estate market, as an investor in the real estate market,
01:53and also in other investments.
01:56Aqba, today we were looking at real estate investments.
02:05The question was, do you think of real estate as an investment?
02:10Most of the answers were yes, they always think of real estate as an investment, more than 50%.
02:18While some people believe that real estate has high risks and is not interested,
02:24and requires a deep study.
02:26The percentage is between 10% and 20%.
02:30I know that you are in the first place.
02:34But for the rest, who believe that the risks are high,
02:39and require a deep study and are not interested, what do you say?
02:43Real estate has always been said to be sick and dying,
02:49and that the real estate is the son of the bar,
02:53and many other statements in this field.
02:56Real estate is always a stable source,
02:59and it is very important for any person,
03:02as I mentioned in the introduction of the program,
03:05that 80% of the world's population considers it the biggest financial deal
03:09they have in their lives as a real estate investment,
03:14or as buying a house, of course.
03:18The most important thing, as I mentioned, is that it calls for stability.
03:23Real estate is important and necessary, even for large investors,
03:27to have diversity in the portfolio, whether it is shares, gold or cash,
03:33and also real estate, which is the stable source.
03:37But even real estate should have diversity,
03:41in terms of geography and the type of real estate.
03:45But if we look at the market,
03:49we have seen large deals in the real estate market,
03:53in our region, and even around the world, we have Dubai.
03:58If we look at this clear picture,
04:00this of course confirms that the prices are not only rising,
04:05but we are seeing large fluctuations.
04:07My first investment was in 2007.
04:09After 2007, we have seen a decline,
04:12with the Lehman Brothers crisis and the global financial crisis,
04:15with more than 40-50% in some regions.
04:17We have seen a recovery,
04:19it took about 7 years to return to 2014,
04:24to a new peak, and I bought again.
04:28It took about 10 years to reduce these losses.
04:35Are these the cycles of the real estate market today,
04:38or is Dubai an exceptional case?
04:40I say that Dubai is an exceptional case without a doubt,
04:43and it differs from other countries in the world,
04:47in general and in particular,
04:50in what it produces and what the world admires.
04:54But it is very important,
04:56when buying real estate,
04:58to do a lot of research,
05:00whether you are buying on a plan,
05:03or you are buying ready,
05:05and the timing is very important when buying.
05:10There is a certain deadline,
05:12then you have to go through any economic cycle.
05:15It took you 7 years,
05:17but the real estate cycle in Dubai,
05:19according to my experience of 30 years in Dubai,
05:21is about 5 years,
05:23from 4 to 5 years, yes.
05:25It is a fast cycle,
05:27it starts slowly,
05:29then it starts, then it returns.
05:31If you notice,
05:33the current prices in the market,
05:35are equivalent to the prices in 2013,
05:38but you should not forget,
05:40that there is a return on this investment.
05:42In these 10 years,
05:44if you had 6 or 7% yield,
05:47on the head of the invested money,
05:49you got back 70% of the head of the money,
05:53and now you sell it at the same price,
05:55so you made 70%.
05:57Since you talked about the return on investment,
06:00let's look at the returns today,
06:02in most of the Arab cities,
06:06and we also notice in this chart,
06:08that in Dubai,
06:10the return varies from region to region,
06:12residential or commercial,
06:14it can go from 6% to 10%
06:17but as an equation,
06:19it is above 6%.
06:21Tunisia gives a return of 7%,
06:23Egypt more than 7%,
06:25about 8%.
06:27How do you see today,
06:29the return on rent,
06:31and the return on rent,
06:33as a basis for investment?
06:35It is very important to note,
06:37that the return is linked
06:39to the local currency.
06:41If we notice,
06:43for example, in Cairo,
06:45the return is linked to the dollar,
06:47while the dirham is linked to the dollar,
06:49so it keeps its value.
06:51This means that the rent,
06:53in Egypt,
06:55or in Tunisia,
06:57or in Turkey for example,
06:59the value of the local currency
07:01has been greatly reduced
07:03compared to the dollar,
07:05which does not correspond to the increase
07:07of the rent,
07:09as a basis,
07:11or to the returns.
07:13If you calculate the dirham,
07:15which is 6.8%,
07:17it is twice as much as the return
07:19in Cairo or Tunisia.
07:21Let's talk about the American dollar.
07:23Many people come to us today
07:25and ask us
07:27if we want to invest in real estate,
07:29but we do not have the cash.
07:31Would you advise us
07:33to take a personal loan
07:35and pay the first payment?
07:37A personal loan poses
07:39great risks.
07:41It is easy to get it,
07:43but a personal loan
07:45is usually more expensive
07:47than a real estate loan,
07:49so the cost of the loan
07:51is usually higher.
07:53Anyone who wants to invest,
07:55let's assume that he is a foreigner,
07:57we also say that money does not belong to you
07:59or your children,
08:01so it is necessary
08:03if you are certain,
08:05even because no one can be sure
08:07of the future,
08:09but if you live in this country
08:11for 5 or 10 years,
08:13you have a certain income,
08:15so it is not necessary
08:17to buy real estate
08:19instead of renting it
08:21in exchange for a loan.
08:23But there is always a known equation
08:25in lending,
08:27so that it does not exceed
08:2927% to 32%
08:31of the family's income,
08:33plus 5%
08:35of the expenses,
08:37because real estate
08:39can cost you taxes,
08:41maintenance,
08:43maintenance,
08:45these things from time to time.
08:47So as we mentioned,
08:49real estate is either for stability
08:51or for investment,
08:53and in both cases,
08:55there must be detailed calculations,
08:57as well as paying attention
08:59to the interest rates
09:01that play a major role
09:03in buying a house,
09:05and at the moment,
09:07I see that the interest rates
09:09are very high,
09:11and it is necessary to think
09:13financially before taking a personal loan
09:15and exposing the family or the person
09:17to the risks of increasing
09:19these commitments to the banks.
09:21Some monthly payments
09:23may increase by more than 50%
09:25with interest rates rising
09:27from 0% to 5% or 6%,
09:29especially if the loan
09:31is 25 years old.
09:33Of course, this is a very important point,
09:35but you mentioned that
09:37you don't have a big down payment,
09:39and you don't want to get into
09:41the headache of investing in real estate
09:43and the interest rates.
09:45Some people also say
09:47that the interest rates
09:49move closely to the stocks,
09:51and their movements are linked
09:53to the stocks.
09:55So what is the best way
09:57for an investor to invest
09:59in a real estate portfolio
10:01or a real estate portfolio?
10:03It is very important
10:05to study the interest rates,
10:07which is called real estate in trust.
10:09The most important thing
10:11when you want to buy
10:13or contribute to the shares of this interest rate
10:15is to pay attention to the amount
10:17of debts on this interest rate.
10:19Most of them are liable
10:21for real estate.
10:23The second thing is to evaluate
10:25these principles.
10:27Many real estate bonds
10:29evaluate the buildings
10:31with a double price,
10:33which affects
10:35the share price.
10:37If there are also debts
10:39on this real estate bond,
10:41and these debts are linked
10:43to the interest rates,
10:45the profit will not be achieved.
10:47Even if they pay
10:49what we call a dividend,
10:51they may pay
10:53from the original.
10:55If we notice in America
10:57or Canada,
10:59the real estate bonds
11:01have dropped
11:03by 50%.
11:05You have to be patient.
11:07Real estate investment
11:09is a medium to long-term investment,
11:11from 7 to 15 years.
11:13In the end,
11:15you also have to study
11:17and make sure
11:19the value of the debts,
11:21who is the board
11:23and what they own.
11:25Do you want offices
11:27or real estate
11:29as residential or industrial?
11:31At the end of the day,
11:33we always try to advise
11:35the investor.
11:37I have always advised
11:39that real estate should be
11:41a step to enhance
11:43the future of the person,
11:45and not be a burden
11:47on him.
11:49Therefore,
11:51those who go to personal loans
11:53to pay first,
11:55I think
11:57most of them are going
11:59to ruin in these steps.
12:01If the person does not have
12:03a down payment,
12:05meaning he has already
12:07saved it,
12:09it is possible that he will invest
12:11in real estate and study
12:13the monthly payments
12:15for the loan.
12:17Because people in debt
12:19may have a financial problem.
12:21What is your advice to the investor?
12:23Before investing,
12:25you have to pay attention
12:27to the geographical situation
12:29and other things.
12:31In the end, I say
12:33that you should invest
12:35where law prevails,
12:37and justice is the basis of sovereignty.
12:39The best investment is
12:41the company of choice,
12:43and then the real estate
12:45should be in the right place
12:47at the right time
12:49to make all the differences
12:51between expenses,
12:53currencies,
12:55and the difference between
12:57currency and taxes.
12:59And here, of course,
13:01when the four poets
13:03meet,
13:05the executive director
13:07of J-Project,
13:09thank you very much
13:11for this participation with us.
13:13And of course,
13:15our viewers,
13:17the address is
13:19shifrat.almal.arabia.com
13:21Goodbye.