To bridge the gap between high-performing real estate markets globally and those in the Middle East, professional services firm PwC Middle East has detailed six guiding principles for regulators in a new report titled ‘Six Steps to Sustainability.’
Governments in the Middle East have implemented wide-ranging economic measures and incentive packages for their respective Real Estate markets in recent years in hopes of driving growth and boosting the sector.
Despite this effort, when compared to global markets using multiple indices, Middle East markets are working on enhancing certain market fundamentals, which are critical to achieving sustainability and growth in the long-term. Taking a closer look, within global indices such as the International Protection Rights Index, the Real Estate Transparency Index, and the UN E-Government Development index, Middle Eastern Real Estate markets are classified as being at a developing stage.
In response to the classification, PwC Middle East has conducted an analysis of top-ranking markets within such indices to draw best practices for the region and to suggest six guiding principles for regulators to follow:
• Integrated legal framework
• Land/property register and cadastre system
• Effective governance
• Proficiency of service
• Sustainable financing
• Data management and transparency
These guiding principles were developed to help address specific issues present in markets in the region. Namely, market distortions, imperfect competition, asymmetric information, and other externalities. While the real estate markets in the region as a whole can benefit from the six guiding principles, each country has a varying degree of maturity within each category.
Commenting on the report Dr Martin Berlin, Real Estate Leader at PwC Middle East said: “We see huge potential for growth in Middle Eastern Real Estate markets. Across the region, many regulators are already making strides in closing the regulatory gaps between the Middle East and high-ranking markets globally. We developed six principles to act as a guide based on an analysis of these high-ranking markets to support regulators in their quest to achieve long-term sustainable growth.”
“We believe the six suggested principles ,when followed, will have an impact on reducing volatility in the market and have a price correcting effect, reducing the cost of living for households and related costs for businesses and taking inflationary pressures off wages,” he added.
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