Gulf Property Rebound Seen
DUBAI — Most investors expect to see property prices rise moderately over the next two years on growing signs of maturity and greater market stability in the Gulf and the Middle East, market analysts said in two latest reports.
Surveys by world’s two leading property market consultants, Jones Lang LaSalle and Colliers International, suggest that investor confidence is resurging across the region in the backdrop of a steady demand from institutional investors.
Colliers International’s Global Investor Sentiment survey suggests that Gulf real estate markets showed signs of recovery and were expected “to bounce back slowly but surely” in 2010-2011. While Jones Lang LaSalle believes investor confidence in real estate markets across the Middle East and North Africa region has stablised over the past six months.
The UAE is seen as the region’s most competitive market according to investors surveyed Jones Lang LaSalle. This is largely due to the high rankings of Dubai and Abu Dhabi in the city competitiveness criteria. In terms of city competitiveness, Dubai and Abu Dhabi have the highest MENA rankings.
“Notably, Institutional investors ranked Dubai in the first place as the city was top ranked in 10 of the 13 criteria of city competitiveness in the MENA region. Abu Dhabi topped the other 3 out of 13. Collectively therefore the UAE scored highest in all categories of City competitiveness,” the Jones Lang LaSalle report said.
“Investors consistently scored Dubai highly on factors such as infrastructure, connectivity, real estate transparency, quality of life and other attributes,” it said.
The bullish regional outlook for the real estate sector is in line with the general optimism across the globe. Real estate investors worldwide are painting a more optimistic picture of the market, with many convinced that the next up cycle will begin in the year ahead, Colliers said.
“There will likely be positive investments in the vital real estate sector in the Gulf region. Property markets are still on the downward leg but are expected to be showing signs of recovery one year from now,” said the Colliers report.
Most investors are planning to expand their real estate portfolios in the coming year as they believe that their respective domestic real estate markets are at or near the bottom,” the report continued.
There are more buyers than sellers of investable assets in the Middle East real estate markets, according to findings from Jones Lang LaSalle’s Fourth Investor Sentiment Survey. The findings of the survey revealed a steady demand from institutional investors, mainly seeking to buy strong revenue generating property, but at the right price.
There are signs of maturity and greater market stability in Middle East North Africa markets, as investor sentiment has remained broadly stable over the past six months. In general, most respondents expect to see real estate prices in the region rising over the next 12-24 months albeit it at moderate levels.
More than 75 per cent said Dubai’s real estate market would not see recovery for at least 12 months and more than 40 per cent for at least two years.
