Recent real estate reports have shown that real estate markets in the region faced numerous challenges in 2017, resulting from pressures on public budgets and economic efficiency in terms of risk and liquidity, which had a direct impact on the quality of investment opportunities available within the overall market.
The real estate market is stable
Al-Mazaia Holding’s weekly real estate report explained that the final trends shown by the real estate sector in the region at the end of 2017 demonstrated its ability to face these challenges and adapt to the rapid developments in the oil andglobal financial markets, in addition to the geopolitical developments affecting some countries in the region.
The report stated: Consequently, the overall outlook for real estate market performance can be described as stable and capable of generating returns, despite the declines in rental rates for all real estate products and the decreases in the values of real estate sales and transactions in general, resulting from the decline in thetotal volume of investment liquidity injected into the local economies, which is aimed at medium- and long-term investment.
Expansionary spending on projects
Conversely, the indicators reflected in the approved budgets reveal that countries in the region are continuing to pursue expansionary spending, targeting and stimulating all sectors in accordance with priorities and project efficiency, which bodes well for the private sector’s ability to move forward with current projects and embark on new real estate and investment ventures that are no less significant than others in terms of returns and their contribution to cumulative gross domestic product in the coming years.
Plans and forecasts have dominated the overall investment landscape across all sectors at the expense of actual, final achievements, as official authorities focused on plans to lift subsidies, liberalize prices, and move toward the implementation of taxes—all to control the deficit caused by declining oil revenues, the impact of which persisted throughout the year.
Decline in Mega Real Estate Projects
The region’s markets did not see the launch of any additional mega real estate projects, whose headlines and substance have faded, while the initial public offering (IPO) markets witnessed more underwriting activities, and the only constant amid these complex dynamics is the widespread expectation of better results in the future; as the achievements made so far have remained relatively modest, with hopes that the coming year will bring more accomplishments and tangible results.
