The GCC’s real estate market is changing
After a tumultuous couple of years, the GCC property market is witnessing new trends that will change the face of the construction industry in the years to come
The property market in the GCC has gone through its ups and downs over the past couple of years, leaving many industry leaders at odds about its true current state, and what the future may hold.
Last month, at Cityscape Abu Dhabi, leading property developers launched a number of massive residential projects across the UAE, despite continued fears of a slowdown in the market among many of the exhibition’s visitors.
Many experts, including David Godchaux, CEO of Core Savills, believe that the property market in the GCC – and, more specifically, in the UAE – has matured over the last decade (page 30). The overall effect, they say, has been a positive one, despite the hardships caused by stagnant oil prices, and the austerity measures taken by states in order to counter their impact.
Whether the result of market maturation, or a necessary adaptation in the face of current market challenges, there can be little doubt that the property market in the region is seeing new trends. A significant shift towards mid-market and more affordable residential units can be seen in many countries, and is increasingly becoming a key driver behind new residential projects in major regional markets such as Saudi Arabia and the UAE.
As an example, Aldar Properties, one of the largest property developers in the Emirates, recently announced plans to invest $518m (AED1.9bn) in the development of mid-market residential, hospitality, and retail projects.
Just one month later, the company followed this with the launch of its affordable development, The Bridges, during the Cityscape exhibition. Aldar subsequently sold out two of the development’s six towers during the three-day event.
A few weeks later, the development’s third tower sold out in just four hours, generating a total of $163m (AED600m) across all three towers, conclusively proving the resilience of the mid-market segment, and highlighting the changing appetites of consumers in the market.
Taking note of this shift, property developers are now focussing on attracting the attention of buyers by offering guaranteed rental returns, waiving Dubai Land Department fees, and providing post-handover payment plans, as well as delivering a host of other customer-friendly options.
The GCC has one of the fastest growing populations in the world, with a continued influx of people that is set to increase in the next couple of years, driven by global events like Expo 2020 Dubai and the 2022 FIFA World Cup in Qatar. In response to this, countries are positioning themselves as global business hubs, with leading airlines, and national visions that aim to push forward the development of non-oil sectors and boost diversification within their economies.
As a result of such plans, property developers in the region are confident that demand for residential property will not subside any time soon.
This optimism is also supported by the growth within the tourism sector, not only in the UAE and Qatar, but also in countries such as Saudi Arabia, which, in 2017, is focussing on the hospitality market like never before.
In fact, Saudi-based Cayan Group chairman, Ahmad Alhatti, tells Construction Week that his company is determined to embrace the new opportunities presented by the hospitality field.
He explained: “From the aspiration for serviced apartments, to resort-style living, hospitality is changing the game,” adding that hospitality is intrinsically linked to tourism and real estate across the GCC.
Though most industry insiders claim to be optimistic about the future, reports continue to indicate declines in certain sub-sectors of the property market throughout Qatar, Bahrain, Saudi Arabia, and the UAE.
Whatever the future may hold, it goes without saying that the shifting trends of today’s real estate market will shape the face of the GCC’s construction industry for years to come.