Kuwait Real Estate News
Gulf property markets facing tough times
The Commercial and real estate market in the Gulf are under severe pressure, given, the tight liquidity, lesser demand, and loss of consumer confidence. This is in accordance to a report published by Moodys Investor Service, the leading rating agency.
Saudi Arabia, a top oil exporter will survive a tough real estate market this year, due to high demand for residential property, despite the downward trend noticed in the rest of the Gulf, indicates Moody’s Investors Service.
Saudi Arabia will be an exception in this case, as it is hugely benefited from the growing indigenous population base, structural under-capacity for residential property, particularly for low and middle-income families.
The Dubai and Doha property markets, which were bustling with activities, are the most affected now, with a steep decline in property prices, and slowdown in construction activities, the agency reported.
The demand for residential properties in Arab region, have also been hit hard due to layoffs by majority of the companies in Gulf, and has therefore created an over-supply in the rest of the Gulf.
At present, the Dubai property sector is undergoing sharp correction and several construction projects have been cancelled due to the economic recession. But Moody’s still expect strong support by the government to continue, which will benefit most property firms in the region.
Meanwhile, the cement companies in Saudi Arabia have already announced their first-quarter earnings, which show an annual contraction in net profit, mainly due to increasing stockpiles owing to ban on exports. However, the sales and profitability has increased compared to fourth quarter of 2008. The cement output capacity is likely to double to 60million tons within next three years.
According to analysts, the ban on cement exports by the government needs to be lifted for continued growth in profits.
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