Moreover, Al Mazaya’s report adds that the
current growth level has not reached the
levels of force required to include all real
estate products that can be implemented.
Growth is currently moving ahead by virtue
of the residential sector, in addition to the
hospitality sector, in which investment
constitutes an added economic and
investment value, due to the fact that the
sector has been the most coherent and
stable during and after the period of the
financial crisis, and the topmost to achieve
returns in the past and at the present time.
The demand growth in the real estate
market, as shown by the report, has
allowed the registration of harmful
deviations and pathways to the ultimate
beneficiary. The price of land, apartments,
and villas has risen proactively rather than
in parallel with the demand levels. The
report shows that demand growth is often
concentrated on specific locations, with
the price index rising everywhere and in
varying degrees. It is worth mentioning
here that the real estate development
companies are seeking to present the
largest possible number of real estate
projects with the aim of exploiting all the
investment opportunities that now exist
after the period of decline in investment
projects and opportunities, considering
the significant losses they incurred on their
financial positions as well as the withdrawal
of a large number of companies from the
market. According to the report the total
registered activity within the real estate
sector in the region is to commensurate
with the number of real estate development
companies licensed to operate, which
means that there is high competition
for projects put forward till this moment.
The desire to exploit the growth of
investors is likely to push towards entering
into such transactions again. In this regard,
the real estate laws should prevent real
estate development companies from the
sale of real estate units on-map through
advertising, marketing, or selling, unless
the necessary permits from the competent
authorities are obtained. Furthermore, the
escrow account number of the project must
be obtained. The competent authorities call
those interested in real estate investment
not to be deceived by any purchase or
real estate unit reserve on the map, to
confirm that the developing company has
obtained the necessary licenses, and
not to depend on advertisements or the
project view in the specialized real estate
exhibitions that are organized periodically.
The report also touched on the fact that
the operations of sales test on the map do
not fit all real estate markets in the region.
During the financial crisis period, the
real estate activity in many GCC States
had not reached the stage of the price
equilibrium nor had the size of the supply
of various real estate products stabilised
either. In addition, the sources of demand
did not vary and recede due to the internal
demand; hence, it is hard to say that the
market has overcome all the challenges
and reached high levels of confidence. In
this regard, the emirate of Dubai is said
to have succeeded in testing the return of
sales on the map successfully, since the
Emirate has witnessed the launch of new
real estateprojectsdueto intensivedemand
by the final investors. The big real estate
companies have adopted this trend and
performed the sales on the map, topped by
Emaar Properties and Nakheel Properties.
Mazaya Monthly Real Estate Report - November 2013
3
AlMazaya’sreportwarnsthatthemovement
happening in the real estate market allows
for the return of sales on the map that will
again open speculative operations, the
return of the activity of brokerage offices,
and more advertisements and marketing
operations of the projects on the charts.
