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Gulf governments must act to safeguard real estate
markets from unnecessary fluctuations
The fortunes of the real estate
sector in any country are closely
linked to the health or otherwise of
national and regional economies.
When government investment in
infrastructure is decreased, or when
regional liquidity is tightened, or
when regulations are enacted to
stem the pace of economic decline,
the real estate sector will always
suffer. It is natural that developers
are reluctant to commit to new
projects during times of economic
uncertainty or when credit is hard to
come by. Likewise, when uncertainty
abounds, buyers will stay away. The
challenge, then, for governments, is
to keep the market stimulated but not
overstretchedduringtimesofpotential
economic difficulty – managed
correctly, the real estate sector is a
generator of considerable wealth.
In the Gulf, the real estate sector waits
nervously to see how the region’s
governments will amend investment
budget plans in light of low oil prices
over the coming year. Much of the Gulf
real estate that is currently under, or
slated, for construction was commenced
when oil prices were higher and the
good times looked endless. It is safe to
say the market was not prepared for the
dip prices have taken in recent months.
Mazaya Monthly Real Estate Report
Week 3 - October 2015