Oil prices to further impact GCC property market
Dubai may benefit from more inward regional investment despite uncertainty elsewhere
Further declines in oil prices may have a negative effect on regional property markets, real estate expert says.
With a sustained period of uncertainty, falling price of oil and a general weakening of the economy, the recent US election results may also cause further uncertainty for the Middle East’s real estate market, at least in the short term, according to a recent report by Cluttons.
Steven Morgan, senior partner at Cluttons said: “An uptick in imported inflation as a result of a weaker dollar will put already stretched Middle East household finances, still reeling from the economic fallout of the low oil price environment, under further pressure.
“Inflation is already rising in the region due to cost containment measures introduced by the region’s governments as they work to cushion budgetary shortfalls.
“Any further contraction in oil prices will also have negative ramifications for the property markets, especially where the oil sector dominates office take up and is responsible for the bulk of new household creation,” he added.
Morgan was optimistic however of the long-term effects of the current uncertainty in the market, noting that Dubai especially may benefit from more inward regional investment.