ME property market among world’s fastest growing
NEW DELHI, 2 days ago
Middle East real estate market revenues have augmented at a compounded annual growth rate (CAGR) of 4.7 per cent between 2009 and 2014, making it one of the fastest growing sectors across the world, a report said.
Foreign real estate developers have infused billions of dollars into places such as Oman, Qatar, Dubai (UAE), Saudi Arabia and other countries in Middle East region, which has pushed the growth of this market, explained the Middle East Real Estate Market Research Report published by Ken Research, a leading global industry research and information service company.
UAE real estate market has been amongst the major real estate markets throughout Middle East countries. However, the real estate market of the UAE was perhaps one of the most affected economies in the Middle East during the global economic slowdown in 2008. However, the market in Dubai has entered into the recovery phase in 2010 with a decline in the rental rates, said the report.
On the other hand, Abu Dhabi’s real estate market has continued to feel the pressure with an oversupply of office spaces and declining rates in the neighbouring cities such as Dubai. The property markets for both Dubai and Abu Dhabi have experienced even larger amounts of volatility over the last couple of years in comparison to their neighbours. This is because both countries were seeking ways to diversify their economy away from oil, it said.
The real estate market in Saudi Arabia has shown a positive growth in the recent past, however prices or rental rates of residential properties remain comparatively higher than the other regions in the Middle East. This has been attributed by the shortfall in the supply of residential properties and rapidly rising demand from young domestic population.
On the other side, the real estate market in Egypt stabilised itself in 2010-2011 with the majority of demand having emanated from the young domestic population. In addition, the real estate market in Egypt entered a quick recovery phase in 2009 due to the booming domestic economy and increasing development activities, along with higher investment inflows. This as a result, has augmented the real estate market of Egypt, and is likely to follow the same growth trend in the coming years.
Kuwait conversely experienced a slowdown in the price of real estate during 2008 and into early 2009. The severity of the drop was as deep as in other countries throughout the region. This is because the country’s real estate sector is the second largest contributor to economic growth after oil. As a result, asset prices in the Middle East region has dropped between 25 to 50 per cent, depending upon the asset class.
Qatar’s real estate market experienced extreme boom and bust cycles in 2009. This is significant because it has highlighted how Qatar has been through a similar situation as the UAE.
The property market in Jordan has faced similar challenges as other real estate markets throughout the Middle East region where prices have dropped between 10 per cent and 15 per cent since the peak in 2008. The property market in Bahrain has been affected severely by the global property markets as prices have dropped by 37 per cent since peaking. The luxury property markets were hardest hit as investors cancelled orders on a variety of construction projects.
Overall, the real estate market in the Middle East entered a correction phase in the year 2010 with a major portion of demand inflow from the residential segment. The demand is primarily generated by the low- and medium-income segment of the population and therefore the developers have been focusing on building affordable and economic housing properties to cater to their requirement. – TradeArabia News Service
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