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In all of the Gulf countries, the private
sector naturally leads the way in terms
of real estate development, innovation
and implementation. However, a low oil
price presents a formidable obstacle
to achieving previously set targets and
delivering sustainable profitability for
private developers. It is natural that as
the oil price heads south, the industry
does what it can to recalibrate its targets
and to continue moving in the right
direction. Perspectives change during
periods of decreased liquidity, as do
imperatives. It remains of tantamount
importance to continue to safeguard the
industry as much as possible through
intelligent regulation and investment.
Not every country in the Gulf will feel
the effects of oil price fluctuations
identically – the real estate sector in
each country will then necessarily have
to react to circumstance differently.
There is no one-size-fits-all solution.
Al-Mazaya Holdings Weekly Real-
Estate Report points out that while
liquidity flows in the region decline
in line with a weakening oil price,
it will likely be difficult for the real
estate industry to enjoy previous
levels of investment. It is not all
doom and gloom, however – financial
services sectors in the Gulf continue
to perform well, particularly in the
UAE. Commercial sectors, too,
continue to post strong returns and
we see increased employment across
the region as job opportunities are
created. In Saudi Arabia, we see the
industrial sector growing (related
perhaps to increased oil production –
a factor in bringing the price down).
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Mazaya Monthly Real Estate Report -
Week 3 - September 2015