The real estate sector, as a result, is
expected tobeoneof themainbeneficiaries
of the Gulf’s return to economic health.
Additionally, the desire of local banks
to refinance real estate loans, as part of
a wider effort to purge underperforming
debt burdens, will spur the real estate
sector. The refinancing will see the
real estate sector enjoying heightened
levels of liquidity and enable rapid
progress for construction projects.
The Al Mazaya Weekly Report forecasts
strong growth in the real estate sector
over the coming twelve months, growth
that will be sustainable for the long-
term, as well as self-perpetuating,
generating excellent returns for the
national economies of the region.
Mazaya Monthly Real Estate Report - August 2014
3
Dubai, of all the GCC economies, has risen
most rapidly from the lows touched during the
dark days of the global financial crisis. This
is thanks to the emirate’s proactive approach
towards implementing the measures needed
to create growth, particularly in the real
estate sector. Specialised government
committees have overseen construction
projects, ensuring they are not obstructed by
bureaucracy. This move has seen confidence
return to the investment community
quickly, and has encouraged individuals
and organisations to enter the market.
It is clear that Dubai has learned lessons
from the difficulties encountered previously
and this time charts a path to growth that is
less vulnerable to volatility on global markets.
Al Mazaya Report says real estate
transactions in Dubai have performed
strongly recently, increasing by 41 percent
in the first half of the year compared to
2013. Some AED113bn was transacted
to June, compared to AED80bn a year
previously. This figure demonstrates
there is confidence in the market and that
strong growth has returned. The challenge
now for policy makers is to ensure
the momentum is maintained and that
fears of another bubble are kept at bay.
In Bahrain, the Central Bank is doing much
good work to find solutions for distressed
real estate projects, finding deals to
move the projects forwards to re-inject
some form of dynamism into the market.
In order to do this, the Central Bank is
currently engaged in a lengthy feasibility
project, intended to discover as much
relevant financial information as possible
relating to the country’s failed real
estate projects. When completed, it is
expected the market will see rapid growth.
The Central Bank, when it has all of the
required information, will make a series
of recommendations – by the end of
the 2013, the total value of distressed
real estate projects in Bahrain stood
at some BD400m. Evidently, there is
much fact finding to be done in order to
ascertain the viability of each project.
