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Mazaya Monthly Real Estate Report -
Week 3 - October 2015
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Al-Mazaya
Holdings
Weekly
Real-Estate Report stresses the
ongoing importance of government
interventions in the real estate
sector in order to maintain market
momentum and to keep liquidity
flowing, especially from overseas. It
is also important that governments
continue to invest in infrastructure
and related projects, and by doing so
demonstrate their confidence in the
sector. In particular, by continuing to
invest heavily in the tourism sector,
Gulf governments can send a powerful
signal to the real estate market,
showing that funds are still available
for large-scale projects that have the
capability to help the region generate
revenues that are non-hydrocarbon
related. We believe tourism sector
spending will become increasingly
important over the coming decade,
and increasingly attractive to the
region’s governments as a result.
Over the coming years, Al-Mazaya
Holdings Weekly Real-Estate Report
believes that Islamic financing models
must be developed to better serve
the needs of the real estate sector.
Current Sharia-compliant lending by the
region’s Islamic banks still lag Western-
style lending in terms of flexibility of
repayment schedules. We note that
Islamic banking is currently a growing
sector, and that Islamic bank assets
are greater now than at any point over
the last five years. We speculate that
demand for Islamic finance products
will grow by seventeen percent in Saudi
Arabia over the coming year to some
AED340bn. The UAE will rank second
with an asset base of $144bn, followed
by Qatar, which will hold $111bn. Islamic
banks increasingly play a fundamental
role in the region’s economies, and we
believe this role could be considerably
bolstered should real estate sector
lending practices be modernised.