Details

-Consistent FDIs flows, robust financing structures set to ensure real estate recovery in 2019

 

-Property markets developing stimulus packages to increase demand, boost competitiveness

The GCC states have been able to utilise the regional and global developments and changes witnessed over the past few years, including financial crises and economic pressures, to spur economic growth and move towards greater financial and economic attractiveness.

Al Mazaya Holding’s weekly real estate report states that the comprehensive stimulus packages launched recently across the GCC region create a source of confidence for the real estate, tourism and industrial sectors, a fact which is verified by the increasing contributions of these sectors to the GDP of Gulf countries over the past few years.

Al Mazaya noted that each of the economies of the region has its own strengths and distinctive features that differentiate it in one way or another from each other. However, the real estate sector across all these markets has been able to secure a competitive edge that earned it the largest share of current and future investment opportunities from all over the world.

In the meantime, real estate demand is still the same despite population growth, increasing purchasing power and the recently introduced stimulus plans, under which new laws and legislation are being executed, coupled with the flexibility of providing mortgage finance at the local level and easy payment plans that have ensured the attractiveness of the region’s real estate markets.

The report pointed out that the economy of the Kingdom of Bahrain boasts a competitive edge that enables it to survive local, regional and global pressures. The property sector in Bahrain provides a safe investment haven that is badly needed at a time oil prices are falling again, a development that boosts demand and accelerates lucrative real estate deals.

Bahrain’s non-oil sector is expected to grow 4.3% by the end of 2018 with a projected 3% GDP growth as a direct result of strong growth engines, high liquidity in the banking system, expansion of construction projects and implementation of infrastructure projects that are now contributing to the growth of the construction industry by 4.5%, in addition to stable rental rates, which led to higher occupancy levels and rising returns as well, and finally the growing readiness of the tourism sector, which is attracting more visitors and investors.

Al Mazaya reported on the overall performance of the real estate market in Dubai, where good performance is driven by efficient government decisions to stimulate the market and mitigate the impact of surrounding pressures which led to demand slowing down compared to the levels recorded in the past years.

Industry data showed that completed real estate projects in Dubai have pumped more than 14,000 different units during the last period of this year, while conducted transactions amounted to AED12 billion.

In the meantime, real estate projects are being completed as per plan, a fact  which proves the sector’s ability to attract more investors thanks to its high and guaranteed returns and consistently growing values year after year.

In the neighbouring country, the Omani real estate market appears to be in a state of recovery. Real estate transactions show a steady pace of activity, while rental price indices have exhibited signs of consolidation after falling by 20% to 25% over the past few years, which reflects robust symptoms of resumed growth in 2019 that will reflect positively on the market.

In addition, positive developments are being witnessed across non-oil sectors, especially the tourism sector, which continues to outperform other business platforms.

Over and above, the 100 per cent foreign ownership decisions  have drawn a considerable share of foreign direct investment in line with government plans to attract 21 million tourists by 2035 – positive developments which are all attributed to the successful ongoing economic diversification plans.

Al Mazaya Holding concluded that a full recovery on the region’s real estate sectors requires new financing channels for owners, developers and construction companies alike, as well as efficient public-private partnerships in order to ensure consistent FDI flows.