Real estate weakness hurts GCC’s economic outlook

Real estate weakness hurts GCC’s economic outlook:

Weakness in the real estate market has both reflected and contributed to weak economic growth in much of the GCC, particularly the UAE, Qatar, and Saudi Arabia, according to the Institute of International Finance (IIF).

“After consciously targeting real estate investment as a key plank of their diversification strategies, these countries have experienced a persistent drag on overall growth due to the real estate slowdown since the 2014 plunge in oil prices, and a mounting challenge to financial stability,” said Jonah Rosenthal, Associate Economist at IIF.

Prices have fallen largely in Dubai and Saudi Arabia since 2014; Qatar’s prices have seen some temporary upturns but remain well below their pre-rift levels. The weakness of the GCC real estate market in recent years stands in stark contrast to emerging markets as a whole.