Gulf property markets to watch


Opportunities for expatriates and other non-GCC investors in the regional property market are limited to the special leasehold and or freehold zones and laws and regulations that are still being ironed out in many markets up and down the Gulf.

The most sophisticated market remains Dubai, but its issues (freehold title and strata law) have been well documented. Nevertheless, it remains a market to watch. With a number of other cities well on their way to offering attractive returns on investment, we take a look at a selection of markets to watch in the GCC.

The Dubai market will be interesting to watch in the coming years now that Dubai World’s debt has been restructured and the RERA strata law is coming into place. The signs are that these factors will return confidence and therefore investment back to the emirate. Dubai’s model is also one that other countries can learn from when developing their real estate markets as it is the most developed in the Middle East and the recent announcements that Nakheel has resumed work on some projects is positive news for homeowners. Another positive sign was that of Dubai Islamic bank consolidating its share in Tamweel to 57% and vowing to start lending again in November 2010. Prices have already dropped between 50% and 70%, since October 2008, so could this be the bottom?

Abu Dhabi
Abu Dhabi could soon prove attractive following estimates that up to 23,000 units will come online by the end of this year. Asteco Property Management also expects some developers to launch lease-to-own schemes and other incentives to attract owner occupiers. Much of the construction is part of Abu Dhabi’s 2030 Vision, which will shape the emirate, and aims to make it one of the most sustainable cities in the world. Abu Dhabi has the financial muscle to ride out any recession and still make good on its developments. Urban planning and sustainability are the keystones to the capital’s development, and owning property in a city of the future will always be a wise investment.

Like Abu Dhabi, Muscat has implemented its own strategy for economic growth – Vision 2020, part of which was allowing foreign nationals to purchase freehold property and land in designated areas. The global downturn had an effect with prices reported to be 25% off their 2008 peak but there has been renewed interest this year, with specifically Indian and Russian investors leading the way, clearly enticed by the uncomplicated freehold title. One thing is for certain, Oman will never over develop and so investing here will undoubtedly pay off in the long term.

As the first freehold development, the Pearl Qatar located on man-made islands off the coast of Doha, is setting the trend for foreign property investment thanks to backing from the Commercial Bank of Qatar and Qatar Insurance Company. As an immature market, potential investors will look at this freehold development as a benchmark for the future. Qatar’s economy is sound, holding 15% of the world’s natural gas reserves and currently supplying 30% of the world’s liquefied natural gas, whilst only having an indigenous population of around 300,000 people. Qatar’s ambitious plans for its national airline and its tourism sector will no doubt support developments such as the Pearl, through short term holiday rentals.


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