GCC real estate slump continues, but there is light at end of the tunnel, says IIF | ZAWYA MENA Edition

GCC real estate slump continues, but there is light at end of the tunnel, says IIF | ZAWYA MENA Edition:

Price declines in real estate markets in Saudi Arabia, the United Arab Emirates and Qatar are likely to persist given an oversupply in the market and regional tensions, but there are country-specific reasons for optimism in each market, according to a new paper from the Institute of International Finance (IIF).

The paper states that real estate in the region "has often operated on a model that emphasises excess for the sake of excess" and as a result the market is oversaturated with huge developments that have low levels of product differentiation. It also pointed to recent figures from JLL Mena stating that supply in Dubai is set to undergo an average annual increase of 8 percent over the next two years, "far outpacing the projected 2.5 percent increase in the resident population".

JLL MENA's Q1 Dubai report states that the number of residential units in Dubai is scheduled to increase to 652,000 by the end of 2021, up from 520,000 at the end of last year.