Mazaya Monthly Real Estate Report - January 2014
Much work was undertaken in 2013 by
GCC legislators to regulate the market
– particularly the relationship between
tenants and landlords – and to put
safeguards in place for both investors
and developers. As a result, confidence
was boosted on all sides and investment
from overseas was increased. Mortgages
and other methods of financing also came
under government scrutiny and much
progress was made in modernising the
financing tools available to the market.
This work will continue in 2014 and will
solve many problems faced by buyers.
According to Jones Lang LaSalle, Abu
Dhabi real estate generated returns of
between seven and nine percent in 2013,
while Dubai saw between seven and
eight percent. These rates outstripped
European and American rates of return for
the year of between six and seven percent.
4
Spending on infrastructure will continue
to be high in 2014 as GCC governments
sign off budgets focused on social
development. As a result, the real estate
sector throughout the region is likely to be
well supported. In Saudi Arabia, $228bn
has been earmarked for infrastructure
spending and in Dubai the figure is $30bn
for the next three years. In Qatar, $66bn
is expected to be spent on infrastructure
over the course of this year and last.
All of the above is good news for
the Gulf’s real estate market. Vitality
has returned and all indications are
gowth will continue strongly in 2014.
Returns on individual real estate investments
in the Gulf can exceed 30 percent. Clearly,
the good times have returned and investors
from all over the world are looking to take
advantage of the abundant opportunities. This
time, however, regulators have learned from
the mistakes of the past and built in checks
designed to stop the market overheating. The
Gulf’s real estate market is once again robust,
but this time the emphasis is on sustainability.
