The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Opinion

Real estate: Wishful thinking continues in the Gulf

Sentiment in Gulf property is picking up but a truly sustainable recovery is impossible.

With Dubai’s debt restructuring approaching completion, the question is tentatively being asked whether the worst is over for the Gulf’s previously red-hot property market. In most cases, that is wishful thinking.

As other opportunities for investment thin around the world, it could be that stage of the market cycle where oil prices spike. Back in the Middle East, according to a recent report by Saudi Arabia’s NCB Capital, "a turnaround in real-estate prospects now appears imminent across the GCC region".

Even in Dubai, residents are returning from neighbouring emirates, where they had been forced to move because prices in Dubai were too high. According to NCB, mortgage volumes are back to pre-crisis levels, with rates having halved. In Kuwait, sales volumes and values have shown small increases.

But oversupply continues to plague the region, especially in office space. In markets such as Bahrain, hundreds of thousands of units are being completed, at the same time as businesses remain hesitant or simply unable to set up even small operations in the Kingdom.

Government infrastructure spending in markets such as Kuwait might provide alternative revenue opportunities for some builders. But the off-plan sales model is dead in the Gulf and developers still find funding from banks to be scarce.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree