Details

Shedding significant light on promising investment opportunities; fair prices; activities of brokers & speculators

 

Cityscape Global 2017 seeks to determine market efficiency; nature of demand & its sources; monitor negative indicators; forging solutions

 

Current pricing levels attract foreign investments, support end-users

The GCC real estate market is suffering from some fluctuations triggered by government spending plans, private sector strategies and the decline in liquidity levels. The focus is currently laid on the largest real estate event in the region to determine the nature of existing investment opportunities and how to utilise them. Cityscape Global 2017, which was held in Dubai last week, provided an opportunity for companies to determine the nature of demand, its sources and how to deal with the market over the coming period, creating opportunities for investors and end-users, while identifying types of transactions and prices prevalent on the market.

Al Mazaya Holding in its weekly report said that Cityscape Global in Dubai is a primary tool to assess how effective are current laws and legislation in regulating the workings of brokers and speculators as well as the performance of real estate agents who have played a major role in creating the price bubble which was witnessed over the past period and that led to the failure of many projects and the loss of savings. The report said that current prices are attractive for foreign investments and end-users alike.

Al Mazaya expressed concern that brokers and speculators may re-enter real estate markets and resume their activities in the region, targeting those real estate products offered by property companies in foreign markets. The report further elaborated that determining the real price level of investments on foreign markets seems more difficult than concluding how fair are current market prices.

Al Mazaya believes that there are tools that can monitor market performance, as prices, currently witnessed in most of the real estate markets, excluding the British property market, are attractive for end-users. Moreover, low prices generate opportunities to invest in real estate markets and pave the way for price hikes that are fair in some cases and unjustified in some others.

The report stressed the importance of Cityscape Global 2017 in identifying market efficiency, the nature of demand and its sources in addition to monitoring negative indicators and addressing them directly and efficiently.

This comes at a time when all platforms are waiting for the performance of real estate sectors and the nature of subsequent steps to be taken, as well as their positive impact on all parties across the board, said the report.

Al Mazaya suggests that the region’s property markets will recover over the coming period thanks to several factors, including diversity of real estate products offered on the regional and international markets and price attractiveness.

In this regard, the report mentioned that Kuwait has witnessed a good price correction movement of up to 30%, which is quite close to fair values after having seen unjustifiable record highs over the past period, led by real estate brokers and speculators, not to mention the lack of a balanced supply-demand set-up.

The Kuwaiti real estate market is currently witnessing an improvement in investors’ confidence due to the state of price stability reported over the past period.

Al Mazaya noted that the real estate market in Saudi Arabia is getting under control with the objective of reining in brokers and speculators, a positive approach which has started to yield satisfactory results. The recorded decline in prices of residential, investment and industrial land and homes, has contributed significantly to marginalising the role of speculators and licensed real estate brokers whose activities were a major factor behind the price bubble and stagnation witnessed over the past period and the difficulty in boosting citizens’ homeownership at fair prices.

The Saudi authorities concerned are taking precautionary measures to limit the role of speculators and brokers. This comes at a time when the Kingdom has issued a list of licensed real estate offices, imposing fines on owners of unlicensed real estate offices. The Saudi Ministry of Housing will begin in December to register violations made by real estate offices that don’t abide by “Ijar”, a mandatory system that makes it incumbent on licensed real estate agents to register lease contracts and residential online.

The report shed light on the performance of the British real estate market and the roles played by market brokers and speculators, particularly during the Brexit period, which will often result in further imbalances and will trigger pricing deviations that are difficult to avoid. Industry reports indicate that house prices in Britain witnessed a record high in August, increasing by 1.1%, and are expected to post a further hike of 2%.

Concluding, the report underlined the importance of real estate developers and companies maintaining the current price stability, forestalling a comeback by brokers and speculators, and focusing on economic diversification. The report also emphasised the importance of participating in real estate events and activities, being an excellent tool to determine the efficiency of laws and legislation that have been adopted to regulate the real estate sector. The report on this score singled out Dubai’s Cityscape Global, which, it said, has generated positive results thanks to the large number of participating companies and their diverse experience.