38.9 C
Tunisia
Wednesday 23 June 2021
HomeWorldGCC real estate sector recovering

GCC real estate sector recovering

The evolution of a youthful demographic will lead the way for the property sector as it rebuilds itself in the GCC. With 2011 GDP slated to hover around the 5.9 percent mark in the GCC (as compared to 4.5 percent in 2010 and .7 percent in 2009), the real estate markets are once again looking at a growth cycle that feels more tangible, less speculative and is predicated on several drivers that are spurring the climb, according to a report released this morning by Al Masah Capital, a progressive, Dubai based alternative investment house.

Although the trend may not be equal at this point in time across the GCC because of different socio-political situations and due to the gap between the pre-crisis levels and today’s unique market dynamics, the expectation is now fixed in concrete rather than vain hope.

“Perhaps the most vital growth driver is the region’s expanding population, most of which is young and has the ability to create exponential investment in the property sector. It is this young, upwardly mobile demographic that has the potential to dissolve the current fear over high vacancy rates and concerns about oversupply,” said Shailesh Dash, founder and chief executive of Al Masah Capital.

Almost 30 percent of the GCC population is under 15 years and this augurs well for the long term future. Another 80 percent is active in securing higher levels of income, more prudent in terms of money management and smarter when looking for safe investments.

The high proportion of youth in the population curve creates a perfect market. The IMF estimates the region’s population (39.5 million as of 2009) to grow at more than double the pace of the world during 2009-15. This massive segment will exponentially boost the housing sector. Add to this other drivers like the swift economic recovery in this region arising from carefully planned countercyclical government spending as well as the timely upsurge in oil prices and it is easy to accept the projections of swift growth as based in fact. Current indicators do underscore the variance but they are no longer seen as malignant or irreversible. On the contrary, they are generating their own propulsion. For now, the real estate sector in the UAE and Bahrain remains relatively weak, while that in Saudi Arabia and Qatar is rebuilding gradually.

In Saudi Arabia, King Abdullah’s announcement to spend $ 67 billion on building 500,000 homes, as well as the crucial passing of the long-awaited mortgage has been a shot in the arm for the kingdom’s real estate market.

In Qatar the successful bid for the 2022 FIFA World Cup has increased expectations of strong, consistent GDP growth in 2011 and beyond. The highly anticipated introduction of a new rule that allows foreigners to own property and get residency permits in the country is certain to pay dividends.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisement -

MOST POPULAR

HOT NEWS