Value Of Gulf RE Projects Under Way Is $2.39tr |
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The effects of the global financial crisis on the Middle East property sector have become prominent in the dawn of 2009, when the region started witnessing a decline in unit sales and a distinctively massive correction of prices for residential projects. Amidst all this, continuous activity within the region's real estate sector is still being monitored, as governments strengthen their efforts to soften the impact by ensuring liquidity and supporting major developments. With its repute as one of the top destinations for multibillion dollar luxury residential developments, the Middle East continues to play a role in the growth of the real estate market across the globe.
UAE
The UAE is among the regional economies hardest hit by the recession. According to REIDIN.com, the world's first and leading global online information services provider, the average rental price of a residential apartment within its central business district (Dubai and Downtown Dubai) in December 2008 goes to as high as USD 61.35 per sq. m., while sale rates are at 10,599.53 per sq. metre. January of 2009 marked the onset of a serious decline, recording an average of USD 46.01 in rental and USD 7,949.64 in sale rates. However, a review of the numbers from February to May 2009 revealed a steep drop, as monthly rental figures fell from USD 24 to USD 23 to USD 22 to USD 23 per sq. m., respectively. Sales rates have accordingly taken a downward shift, with prices from the same period (February to May) sliding to USD 5705 to USD 5478 to USD 5370 and USD 5453, respectively.
Despite the decreasing trend, experts are confident that the emergence of more realistic prices will attract investors and will result to a healthier market in the long run.
Projects under construction
According to a Future Brand Report on REIDIN.com the total value of real estate projects under construction in the GCC is more than USD 2.39 trillion. In Dubai alone, the government has spent about 33 per cent of its budget or USD 12 billion on infrastructure, with aims to cater to the emirate's rapidly growing population, which welcomes a total of 25,000 people per month or 33 people per hour.
GCC investments into UAE real estate
In 2008, the highest total GCC investment into Dubai came from the Saudi Arabian investors, who pumped over AED 2 billion into the market, followed by Kuwaiti investors, who have shelled out more than AED 1 billion reveals DUBAIFocus, a REIDIN.com product. Although a distant third, Omani investments into the Dubai real estate sector have topped AED 818 million, which is followed by Bahraini and Qatari investors, who have injected AED 615 million and AED 117 million respectively into the emirate's property market. Despite a projected slowdown on the UAE economy's growth from an expected 7.7 per cent in 2008 to 1.5 per cent in 2009, real estate investments are still continuously being funnelled from various GCC countries, which indicate strong consumer trust in the market.
Kuwait and Oman
Two of the region's most promising economies - Kuwait and Oman - have also been affected by the real estate slump sweeping the Middle East. According to market data by REIDIN.com, residential apartment rents in Kuwait's and Oman's CBDs (Kuwait City and Salmiya for Kuwait; Muscat and Ruwi for Oman), which averaged at USD 30 and USD 71.5 respectively in January 2009 are now down to USD 20 and USD 51 in February. In addition, sale rates in the same areas in February averaged at USD 2500 and USD 3820 correspondingly, down from USD 3170.50 and USD 4634.18 in January.
GCC retail property market
'RETAILFocus', a product that delivers an up-to-date database of malls, shopping centres, tenants, projects and retail real estate deals along with retail real estate news and research reports, reveals the GCC region's burgeoning retail property sector. Among the front runners are Saudi Arabia, which is home to 165 retail centres including local malls, multi-use commercial facilities and regional mall chains; and UAE, which currently has a total of 107 retail facilities.
The rest of the GCC economies are also growing in terms of retail property development. The 'Shopping Center Database' in 'RETAILFocus' reveals that Kuwait has 23 retail centres, Bahrain has 15, Oman has 16, and Qatar has nine, another four currently under construction.
-Ends-
© Press Release 2009
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