Middle East Real Estate Market Revenues Have Augmented At A CAGR Of 4.7% During 2009-2014

The Middle Eastreal estate industry is one of the fastest growing sectors across the world. Foreign real estate developers have infused billions of dollars into places such as Oman, Qatar, Dubai, Saudi Arabia and other countries in Middle East region, which has pushed the growth of this market. The real estate market in Middle East encompasses the activities related to the real estate development including management, trading, rentals and leasing in the regions of United Arab Emirates (UAE), Saudi Arabia, Egypt, Kuwait, Qatar, Jordan, Bahrain and Oman in residential, office/commercial, retail (shopping malls and complexes) and hospitality (hotels and resorts) segments.

Real Estate Market Middle East

UAE real estate market has been one amongst the major real estate market throughout Middle East countries. However, the real estate market of UAE was perhaps one of the most affected economies in the Middle East during the global economic slowdown in 2008. However, the market in Dubai has entered into the recovery phase in 2010 with a decline in the rental rates. On the other hand, Abu Dhabi’s real estate market has continued to feel the pressure with an oversupply of office spaces and declining rates in the neighbouring cities such as Dubai. The property markets for both Dubai and Abu Dhabi have experienced even larger amounts of volatility over the last couple of years in comparison to their neighbours. This is because both countries were seeking ways to diversify their economy away from oil.

The real estatemarket in Saudi Arabia has shown a positive growth in the recent past however prices or rental rates of residential properties remain comparatively higher than the other regions in the Middle East. This has been attributed by the shortfall in the supply of residential properties and rapidly rising demand from young domestic population.

On the other side, the real estate market in Egypt has stabilized itself in 2010-2011 with majority of demand emanated through young domestic population. In addition, the real estate market in Egypt has entered a quick recovery phase in 2009 due to the booming domestic economy and increasing development activities, along with higher investment inflows. This as a result, has augmented the real estate market of Egypt, and is likely to follow the same growth trend in the coming years.

Kuwait conversely has experienced a slowdown in the price of real estate during 2008 and into early 2009. The severity of the drop was as deep as in other countries throughout the region. This is because the country’s real estate sector is the second largest contributor to economic growth behind oil. As a result, asset prices in Middle East region has dropped between 25 to 50%, depending upon the asset class.

Qatar’s real estate market has experienced extreme boom and bust cycles as experienced in 2009 with no more than 10%. This is significant because it has highlighted how Qatar has been through a similar situation as the United Arab Emirates. The property market in Jordan has faced similar challenges as other real estate markets throughout the Middle East regions where prices have dropped between 10% and 15% since the peak in 2008. The property market in Bahrain has been affected severely by the global property markets as prices have dropped by 37% since peaking. The luxury property markets were hardest hit as investors canceled orders on a variety of construction projects.

Overall, the real estate market in the Middle East has entered a correction phase in the year 2010 with a major portion of demand inflow from the residential segment. The demand is primarily generated by the low and medium income segment of the population and therefore the developers were focusing towards building affordable and economic housing properties to cater to their requirement.

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Source: https://www.kenresearch.com/mining-construction-infrastructure/real-estate-industry/middle-east-real-estate-market-research-report/637-97.html

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