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Mazaya Monthly Real Estate Report
Week 2 - October 2015
Low oil prices, global financial uncertainty
and decreased regional liquidity must make
Gulf developers cautious
The recent vitality of Gulf real estate
markets can be attributed to the happy
confluence of public and private sector
strategies to capitalise within the sector.
Buoyed by economic recovery following
the global financial crisis, private real
estate developers in the Gulf have been
sufficiently confident in the market to
commit enthusiastically to medium and
large-scale projects, while the public
sector has once again viewed real estate
a key driver of long-term economic
growth and, consequently, been happy
to commit significant investment
to supporting it, chiefly through
infrastructure. However, as regional
government budgets come under strain
due to depressed oil prices, the public
sector will likely have difficult choices to
make with regard to state support for real
estate. As a result, the coming months
will be interesting ones for the sector.
Certainly, the private sector will feel
the pressure of deadlines for delivery
should government support weaken
and concerns about the direction
of the economy naturally increase.
Uncertainty is the enemy of real estate
development and while the market
seeks assurance from government
about the direction of future state
expenditure, we can expect delays.