Borrowing instruments, such as
mortgages, with which investors can
finance the purchase of real estate in the
Gulf are not keeping pace with demand.
They have neither evolved sufficiently in
recent years, nor been made as widely
available as they might have been.
Mazaya Monthly Real Estate Report
April 2014
would reap considerable benefits.
We believe creating an environment
in which banks and other specialised
lending institutions are encouraged to
compete with one another to provide
attractive mortgaging options would
be the best approach to ensuring
real estate lending is modernised
and
innovation
is
embraced.
When individuals with moderate
incomes are enabled to enter the
market in large numbers, backed by
responsible lending, market confidence
would bring about increased supply.
The demand-side and supply-side
benefits are abundantly obvious.
2
Finding Gulf mortgage mechanisms to
embrace medium-income individuals
would allow sector to thrive
In some Gulf countries, real estate
financing equates in volume to as
much as 18 percent of GDP, but it is
still noticeable that – using high rental
prices as an indicator of the difficulties
individuals encounter in purchasing
property – that financing is not as
effective or as accessible as it could be.
Themechanismsarestillnotinplacetoallow
all parties – buyers, sellers, developers
and lenders – to take maximum advantage
of the Gulf’s thriving real estate story.
Asa result, theGulf’s real estatesector’s
growth and prospects are hampered as
entry to market for all but the wealthiest
sections of society is effectively
barred. Should proposed government
initiatives in most Gulf countries
to stimulate the rapid development
of modern lending techniques be
implemented effectively over the
coming year, Al Mazaya Weekly Report
predicts the Gulf’s real estate sector
