Compared to a decade ago, a glance at Hulhumale’ today brings to attention the prevalence of the real estate industry. Once almost bare and dotted by a few rows of low-lying buildings that marked the growing saplings of a newly populated island, the reclaimed suburb now proudly features tall, sleek towers filled with bustling families, and several more complexes are on the rise.
The recent incline in commercial housing projects is further propagated by the influx of new companies investing in this budding sector. A look at Housing Development Corporation (HDC)’s website shows a long list of private firms authorised to develop and sell housing complexes, including veterans such as Amin Buildware, Batch Construction, Damas Company, Ensis Fisheries, FW Construction and Rainbow Enterprises.
As companies old and new unveil their flats and open bookings, some members of the public believe that the exponential rise in commercial housing, in addition to the government’s social housing initiatives, would exacerbate the prolonged housing crisis in the Maldives. However, others counter that the commercial real estate industry can not only provide solutions for reasonably affluent families in need of housing, but also identify persons most in need of shelter, thus facilitating solutions for the latter as well.
Another concern raised is the fear of “excess supply” as an increasing number of firms look to the real estate field, amidst the ongoing development of thousands of flats in Hulhumale’.
In response to this issue, Aqua Vita, which opened bookings in late 2018 for its 14-storey upscale apartment complex featuring 104 flats, asserted the presence of considerable demand for luxury housing in the Maldives. While Aqua Vita expressed confidence that sales were unlikely to be affected even if the real estate market grew further saturated, the company cautioned that prices may drop drastically in the long run, should commercial housing expand at its current rate.
Ensis Fisheries also concurred on the stance that commercial real estate remained highly sought after. The company shared that, upon opening bookings for the 94-apartment complex it is currently developing in Hulhumale’, Ensis had received wide-spread public support.
The fact that real estate is set to enjoy a bright future in the commerce sector of Maldives is a claim further backed by Batch Construction, which revealed that 80 percent of the 70-apartment complex it commenced developing in 2018 had already been purchased. Noting that the highest sales were for 2- and 3-bedroom apartments, the company’s Managing Director Mohamed Saeed stated that there was room for re-sales in the coming years as well.
“As families grow, those living in single-room apartments will want to move to larger ones, selling off the previous one,'' he elaborated.
Despite the recent prosperity experienced by real estate businesses, Saeed identified the tax range in the current market as varying between MVR 300,000 - 600,000 and asserted the need to lower taxes for those that purchase flats from private developers.
Assuring that housing prices can be lowered by decreasing the taxes levied on construction materials and housing acquisition, he stated, “It’s the same customers. Those who can afford the housing will definitely seek to make a purchase”.
“We need a good tax policy to facilitate that”.
With business people across the Maldives all in agreement, evidence seems fairly conclusive that property is one of the best areas for investment. However in business, timing is everything - certainly at present, real estate offers soaring potential for profit and returns to those wise enough to dip their toes in it!