Real estate sector grows
21 July, 2015, 12:00 am
THE real estate sector is projected to grow 2 per cent this year with a share of 5.2 per cent of gross domestic product, making it Fiji’s seventh largest sector, according to Reserve Bank of Fiji deputy governor Ariff Ali.
Mr Ali said the sector grew by 1.1 per cent on average over the past five years from 2010 to 2014 and contributed 5.6 per cent to GDP.
“Stability on the political and policy fronts have underscored the recent growing confidence in the economy,” he said.
“Political stability following the 2014 national election combined with key Government policies including the lower income tax rates implemented in 2012, have led to higher disposable incomes and increasing credit eligibilities for individuals and businesses.”
Given the resultant low interest rate environment from the RBF’s accommodative monetary policy, Mr Ali said there had been a significant increase in the demand for loans and development funds for housing and real estate purposes.
“Fiji’s population growth and rural to urban migration is also playing a role in increasing real estate demand and prices in the urban areas.
“Apart from higher local demand, overseas investors interested in Fiji real estate have also been rising, supporting the growth in this sector.”
However, Mr Ali said, demand for real estate was outpacing supply according to industry liaison and anecdotal evidence.
He said this had led to a general increase in property prices as increasing the supply of real estate took some time.
Demand for real estate in key cities and towns is expected to continue to increase as the Fiji economy grows, together with household and business incomes, and as internal migration — rural to urban — continues.
Real Estate Agents Licensing Board CEO and registrar Ravinesh Murti said earlier the real estate market could not be regulated and the price of the properties could not be controlled.
He said the price of properties was determined by supply and demand.