The Changing Face Of Real Estate In The GCC
Gulf Business|July 2019

AFTER A CHALLENGING DECADE FOR THE GCC'S REAL ESTATE INDUSTRY, WE LOOK AT WHAT INVESTORS CAN EXPECT FROM THE MARKET OVER THE NEXT 12 MONTHS

Emma Hodgson
The Changing Face Of Real Estate In The GCC

REAL ESTATE HAS LONG BEEN A STRONGHOLD OF LOCAL economies in the GCC – from Dubai, where the property market represents 44 percent of consumer price inflation (CPI), to Qatar where it represents 22 percent. Indeed, even in Saudi Arabia, where the market is less dependent on foreign investment, it still plays a vital role in the economy.

However, the 2008 financial crash followed by the dip in oil prices in 2014 marked key challenges for the market in the region. Despite ongoing fluctuations, Dubai has remained one of the quickest markets to adapt to the changes.

“When you look at the city’s real estate market, you really have to look at it from 2003 when the former ruler of Dubai, His Highness Sheikh Maktoum, became one of the first in the region to initiate freehold status for property, inviting non-GCC nationals to purchase property in Dubai”, explains Carla Maria Issa, a senior research analyst at Property Finder.

However, despite a long term trend towards foreign investment, it did not insulate the city from the downturn following the last property peak five years ago, followed by a dip in prices by around a third – something which Issa refers to as “the new normal”.

“When looking at the period from 2014/2015, prices have come down about 30-35 percent, however, that is what I like to consider the new normal. People are more conscientious, and also restricted financially, both after the 2008 financial crisis and in an era of lower oil prices. The city is still very new, but the ‘newness’ of Dubai property as a commodity rather than a true asset has settled.

“Today’s market has seen more landlords and sellers become realistic when it comes to fairer prices and it is more of a buyer’s market than one for sellers. Many residents are now finding Dubai more affordable when it comes to housing,” she explains.

This story is from the July 2019 edition of Gulf Business.

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This story is from the July 2019 edition of Gulf Business.

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