11/01/2017 08:51 AST
The GCC real estate has emerged as one of the fastest growing sectors across the globe despite the recent economic slowdown with Dubai and Abu Dhabi (UAE) and Doha (Qatar) topping the regional list, said a report.
Over the past decade, the GCC region has witnessed rapid economic development and demographic changes, including the influx of expatriates, which in turn has increased the region's overall population.
This, coupled with rise in per capita income, has fuelled the demand for residential units in the GCC region, stated Al Masah Capital, region’s leading investment firm, in a real estate review report.
Post-recession, the GCC has emerged as an attractive destination for global investors and the real estate sector has become a key economic barometer for the growth in the region.
In fact, the GCC real estate sector is one of the fastest growing sectors across the world, albeit the recent slowdown in economic growth due to oil price fluctuations, according to the report.
The report reaffirmed that the GCC markets are still gaining a lot of investor attention as prices are relatively stable, which reflects the real estate market’s maturity and the improved regulatory environment in the wake of plummeting oil prices.
Thus, despite oil price fluctuations, a volatile stock market and geo-political uncertainty, the sector remains resilient and is expected to register growth at a slow pace in 2016 and beyond, it added.
Amongst all markets; Dubai, Abu Dhabi and Doha have emerged stronger owing to international projects, foreign investment flows and growing population, said Al Masah Capital in ist report.
In addition to this, the upcoming Expo 2020 that will be hosted in Dubai and Fifa 2022 to be hosted in Doha, primarily buoyed the demand for exclusively designed amenities and world-class infrastructure spaces.
On the real estate services front, this industry’s contribution to the economy has strengthened over the past decade due to an overall strong property market. The report mentions that, during 2000-09, the real estate services market grew most rapidly in the UAE among the GCC six, it said.
In UAE alone, the real estate services sector employed about 821,560 people (18.6 per cent of the total workforce) and in 2015 the sector contributed about 13.3 per cent to the GDP (gross domestic product).
This industry lateral encompasses facility management (FM) and property management (PM); and both are still in its promising stage in the GCC when compared to developed markets such as Europe and North America. Both the FM and PM markets span a variety of functions, technologies and professions.
Furthermore, the tourism sector is likely to help accelerate growth of the real estate market in the GCC, especially for the UAE, said the Al Masah Capital report.
While hospitality, residential and office lease markets remain buoyant in the GCC, the retail segment is expected to continue its aggressive expansion in the coming years.
Within the residential sector, there is likely to be a continued shift of activity to the affordable sector.
Given the relatively young real estate market across the GCC, a very high proportion of additional space has been in the form of new projects in recent years.
This trend however seems to be changing, with increased interest observed in refurbishing and upgrading existing projects rather than developing new ones.
According to Al Masah Capital, the GCC real estate market has evolved from a predominantly cash-funded, off-plan driven investment boom to a consolidated market, servicing greater numbers of mortgage financed home owners.
The market has become more aligned to global standards, thus giving rise to the services industry, including property management and consultancy. The UAE real estate market has turned out to be highly fr
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