Details

-Al Mazaya report sheds light on expected performance of real estate markets during Ramadan

 

-Stimulus packages augur higher investments returns, draw FDIs

 

-Ramadan promotions spur economic mobility

Geopolitical tensions have become a direct factor in raising the volatility of the real estate market as pressures from the oil and energy sectors continue to increase. This has contributed to an increase in real estate demand at the regional level in general.

With the advent of the holy month of Ramadan, the real estate market is witnessing a lot of positive and negative trends. The real estate market is awash with myriad new commercial, residential and industrial projects, which contributed to the increase in demand for purchases and leases alike.

Al Mazaya Holding’s weekly report said that the real estate sector in the region showed its ability to be cohesive and adapt to market movements. The sector is expected to continue its activity at a good level during the month of Ramadan, before the slowdown expected at the start of the summer holiday season this year.

Al Mazaya’s report indicated that demand in the real estate markets has become more consistent and prices are more reasonable and in line with the surrounding developments. Property owners continue to maintain good returns, with exceptional offers at the regional level, with discounts of up to 20% in some areas and valuable gifts to owners and buyers in other cases, creating a good opportunity for investors and buyers alike.

Al Mazaya underlined the need to continue offering promotional offers during the month of Ramadan.

This month is an opportunity for many families to search for the best housing units in terms of prices. Marketing and promotion will also stimulate the local and regional real estate market to ensure growth and generate high returns for investors.

With regards to the performance of real estate markets during the month of Ramadan, industry data indicate that the UAE property market focused on projects that meet the requirements of the mid-income class, which contributed significantly to a continued pace of demand and boosted activity.

The Abu Dhabi real estate market has recorded a 10% drop in rental and selling prices. These rates are expected to continue to decline but at much lower rates than in 2017, while the market is witnessing good competition with high sales in record time due to the promotions offered by real estate developers in terms of payment methods and affordable prices that suit large segments of buyers contrary to what prevailed over the past period, when the focus has been only on luxury rather than mid-range housing.

Al Mazaya’s report indicates that the real estate market in Dubai will continue its normal activity recorded since the beginning of this year. Market data indicate a clear rise in total real estate transactions during the first quarter of this year to AED58 billion. The market is expected to record new levels of mobility during the second quarter until the end of the year as many essential and infrastructure projects are approaching and will contribute to raising the pace of financial and economic activity on all sectors in the emirate, especially with the approach of the World Expo 2020 Dubai.

The diversity of demand in Dubai’s real estate market is still a source of attraction for both investors and end-users. More than 217 nationalities are benefiting from available investment opportunities in the emirate, which will deepen and expand the base of diversification and growth during the current year.

According to Al Mazaya Holding’s real estate report, the month of Ramadan is expected to witness more mobility in the Saudi real estate market this year. The real estate price index decreased by 1.5% during the first quarter of this year compared to the same quarter of 2017, while the residential sector fell by 2% and the commercial sector by 4.4%. The market is still poised to record further declines on prevailing prices till the end of this year.

Al Mazaya report pointed out that the packages of incentives being implemented either by the Ministry of Housing or by the private sector will increase the number of citizens owning affordable housing in the coming years, while developers must waive part of the profits targeted to activate demand. The price levels that prevailed in the real estate market have had a profound negative effect that the market is endeavouring to survive until now.

On the real estate sector of the Kingdom of Bahrain, Al Mazaya report indicates that this sector has proved its consistency and gradual growth as it has not been affected by the positive and negative developments around it. The real estate scene looks stable during the month of Ramadan in conjunction with the announcement of the establishment of the Real Estate Regulatory Authority, a development which helps the Bahraini real estate market usher in a new stage of development and modernisation that enhances transparency and confidence in the sector.

Al Mazaya Holding’s weekly real estate report predicts that this regulation will reflect positively on the real estate market in terms of increased foreign capital inflows as Bahrain’ s real estate market is set to provide new levels of transparency and security, which will protect the interests of buyers, investors, brokers, developers and financing channels.

It should be noted that last year had witnessed the removal of restrictions on the ownership of real estate with foreign investors now enabled to have 100% property ownership. Therefore, the increase in supply will have a significant impact on prices in terms of sales and rentals. In addition, developments in oil prices and ongoing economic growth plans are set to have a positive impact on demand over the next period.

On Egypt, the report indicates that the sharp rise in prices led to a state of stagnation as large segments of Egyptian society can’t afford the soaring prices. The picture is more positive during the second quarter of this year as the real estate sector is expected to witness active sales on housing units on the back the decision of the Central Bank of Egypt to reduce the interest rates on loans by 1%, as the cost of construction has increased during the past year due to currency floating decision. And any increase in interest rates will prompt investors to seek investment opportunities that provide high returns, primarily in the real estate sector.

Accordingly, the Egyptian real estate market is expected to recover again, with the anticipated continued real estate activity during the month of Ramadan, where it will maintain its activity as usual, said the report, stressing that any positive developments in the real estate market will favourably reflect on the pace of activity due to the high demand for housing units in general.