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Mazaya Monthly Real Estate Report -
Week 1 - January 2016
We expect to see someAED186bn invested
into Gulf real estate developments
to the end of the third quarter, 2016,
demonstrating an underlying confidence
in the market that strong returns are still
possible, despite economic challenges.
However, we believe investors over this
same period will likely be able to negotiate
a total AED78bn in discounts compared
to the same period in 2015, a fact that
illustrates starkly the imbalance between
supply and demand in the market.
We forecast Dubai real estatewill remain
the most attractive real estate asset
class in the Middle East, thanks to the
emirate’s considerable infrastructure
and the international breadth of its
investor catchment area. We expect to
see developments continue in Dubai
for the coming months in the absence
of negative economic news that is
tangible, as opposed to speculative.
Turning our attention to Saudi Arabia,
Al-Mazaya Holdings Weekly Real-Estate
Report is not as pessimistic as some
market analysts regarding the outlook
for the country’s real estate sector.
We believe that although the kingdom
faces some significant challenges in
maintaining
government
spending
programs as a result of falls in the price
of oil, it is better positioned than many
observers realise to adjust to adverse
conditions. Current geopolitical tensions
with Iran do not overly concern us, given
the limited size of Iranian investment in
Saudi real estate – we estimate the total
value of Iranian investment in Saudi
real estate is not more than US$500m,
compared to US$20bn in Dubai real estate.