Kuwait Real Estate News
Property markets in GCC region to remain pressurized in 2012
With demand continuing to surpass supply, real estate prices in Saudi Arabia are continuing to grow, while all other property markets in the GCC region will continue to remain under pressure in 2012, due to challenging global conditions, claim industrial analysts.
Saudi Arabia is actually witnessing shortage in the residential sector, which will keep up buoyancy in prices, despite increased government spending on infrastructure and housing schemes. However, other GCC member nations have seen fall in demand as an aftermath of global economic crisis, coupled with fresh supplies leading to building excesses in the markets.
According to Matthew Green, Head of Research at CB Richard Ellis, Saudi Arabia is likely to see the maximum growth in real estate prices during the year 2012, largely driven by local demand and growth in land and construction costs.
As for other GCC nations, in the UAE, the second largest economy in the region, residential sale prices may fall by 15percent with more supplies coming in, and demand is likely to remain subdued. Dubai witnessed regional real estate boom, but had to borrow heavily to fund its building excesses. However, the prices in the emirate have fallen by more than 50percent since its peak in 2008, while its neighbouring emirate Abu Dhabi faces similar supply-demand problems.
Although Qatar’s economy is fastest growing in the global market, the prices of residential properties are seen falling by at least 10percent due to excess supplies, according to various estimates. The government in Qatar has come up with an ambitious development plan prior to hosting 2022 FIFA Soccer World Cup. However, the positive impact of these plans on realty sector is yet to be watched.
Both UAE and Qatar are likely to see more declines in residential prices in 2012. Qatar will witness fall in prices owing to high levels of construction activity and continued work on ongoing projects, said Craig Plumb, Jones Lang LaSalle.
Meanwhile, JLL revealed that residential prices in Kuwait, Bahrain and Oman may remain flat in 2012. However, there will be less building activity in Kuwait, and the demand for real estate will less, given its small population, with the government being more conservative in its view of development unless the supply is substantiated.
Real estate activity in Bahrain too, will remain this year, with the Arab Spring likely to slow the pace of development activities happening in the country. Oman, on the other hand, is considered a less active property market, as it continues its focus on tourism and eco-tourism, with limited social housing, JLL said.
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