A gloomy report from Standard & Poor predicts that property prices and rents in the Gulf region will continue to fall for the rest of the year. The agency thinks that developers will continue to postpone projects in favour of renting out and managing current stock, and it went on to say that it expects to see a shift away from luxury property towards more affordable housing, and that this will be particularly pronounced in Saudi Arabia.
According to a credit analyst for the ratings agency, prices and rents will continue to decline for the rest of the year, even though some of the properties in Qatar, Bahrain and the UAE have lost up to 60% of their value.
Apparently part of the problem is that the legal and regulation framework in these countries needs to be reformed to help stimulate the property market. Another problem is that the markets are oversupplied, and even though some people want to buy they cannot afford these luxury properties and cannot obtain finance.
The property market in Bahrain and Egypt is expected to remain slow, at least in the short term, which is due to the protests earlier in the year, and a considerable number of projects have been delayed or even cancelled.
Construction isn't expected to restart on any major scale until the political situation has stabilised, and the proper authorities are put into place to issue permits, licenses and property titles. There is also the possibility that property firms in the Gulf region may eventually adopt a real estate investment trust status, as at the moment REITs are relatively rare in this area.
No comments:
Post a Comment