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Mazaya Monthly Real Estate Report -
Week 1 - February 2017
The slump sustained by the
construction sector has significantly
affected the building material sector,
which is known to be one of the driving
forces behind the fall in prices. The
report cited the 30% slide in building
material prices on the Saudi market
last year, attributing it to the slowdown
in private and public construction
operations, in addition to the state of
recession suffered by the contracting
sector due to the rising land prices
and decline in property demand.
Conclusion
The report underlined the importance
of mitigating the competition between
foreign multinationals and local firms,
pointing out that such a heated level of
competition has a negative impact on
the entire market. Foreign companies
are still controlling and owning most of
the developmental and infrastructure
projects as well as the private sector
enterprises, thanks to their experience,
readiness and ability to deliver
projects on schedule at top quality
and optimum investment returns.
Due to the slowdown witnessed in
under-construction
projects,
the
Gulf markets are now witnessing the
most heated competition ever that
would curb, if not mitigate, the local
companies’ ability to survive the
challenges over the coming years.
The report noted that the UAE’s real
estate markets are now stable in the
wake of the slowdown witnessed at
the building and construction sector
in Abu Dhabi, and the fluctuations
and state of unsteadiness in Dubai.
In Qatar, there is a sustained demand for
property, with prices remaining stable and
even rising from time to time, whichmeans
that any potential fall in building costs
would depend on how far the total costs
of the ongoing projects would decrease
so that they might become resilient
enough to deal with market challenges.
The report noted that the region’s
realty markets s have generally
maintained their growth, with property
developments
expected
to
grow
by18% during the first quarter of 2017,
with associated risk levels still low.