Mazaya Monthly Real Estate Report - July 2014
The Al Mazaya report touched on the
instructions called for by the International
Monetary Fund to take tougher actions to halt
the speculative activities in the real estate
market in the United Arab Emirates, despite
the government's measures taken to reduce
rises of property prices and speculation by
imposing more restrictions on real estate
lending. However, there are ongoing claims
and recent studies that confirm the need
in the Emirate of Abu Dhabi for a real
estate index that classifies residential and
commercial buildings, according to specific
and clear criteria. These claims have
been made in order to solve the problems
faced by the market in the emirate with the
worsening of the pace of the differences
between owners and tenants, as a result of
the abolition of the annual increase on rents
– which was set at 5% per annum – because
all parties' efforts must focus in the coming
period on everything that would support the
stability of the real estate market and ensure
its growth due to continuous rises in demand.
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It is therefore necessary to find formal
references to be able to reflect changes
in the forces of supply and demand with
the highest standards of transparency and
fairness, which ensures an active and honest
real estate market during the coming period.
The Al Mazaya report confirms that the
real estate index has great importance in
monitoring all indicators and moves recorded
by the real estate market in the rise and fall at
the same grade. The region's markets have
seen big rises of land prices in selling and
renting. The results issued by the Department
of Statistics and Information showed the rising
of rents in SaudiArabia by 73.5%over the past
seven years, which is an additional challenge
to the budget of the Saudi families, while the
indicators show the space land witnesses
low prices, since the high prices of land is the
main cause of the rise in real estate prices.
The housing projects carried out by the
official agencies are noticed to ease the
pressure imposed by the prices. The
Kuwaiti real estate market recorded a
rise in residential real estate prices which
reached unprecedented levels, while the
level of prices is expected to remain the
same if the conditions that are causing
the high rise remain the same. Therefore
it is certain with the growing prices of
investment properties that a large segment
of the tenants would fail to continue to keep
up with those rises. In the UAE market,
the situation is no better at the level of the
large rises recorded by the rent prices.
The rents values doubled among major
cities between four to six-fold since Dubai
was appointed the host of ‘Expo 2020’.
Flat prices in the Bahraini market recorded
large rises as well, with the rent price for
flats reaching BD 300 – compared with
the average of prevailing rates during the
last period, which did not exceed BD 100.
It is noted that the reasons behind the
recorded rises have varied, and there are
reasons pertaining to the rise recorded on
land prices and others pertaining to the
rise registered by prices of construction
materials and the higher cost of manpower.
Some real estate markets face a clear ebb
in the available space of construction,
and the investors, property owners and
brokers take on the largest share of the
imbalances in the real estate market and
low transparency and justice at the current
time as a result of the ongoing malpractice.
