The real estate markets in the Gulf countries are recovering

According to the Institute for International Finance (IIF), the real estate markets in the Gulf countries show signs of recovery after a period of declining prices and low demand. The governments are introducing targeted reforms in order to improve the property market.

The excess of supply over demand in recent years has been caused, among other things, by low oil prices and by limited purchasing power of the consumers in these oil exporting countries. Growing interest rates, unfavourable exchange rates and regional tensions also contributed to the market slowdown. Property prices have been falling since 2014.

However, Saudi Arabia authorities introduced several programs to promote an affordable housing. In addition, new large-scale mixed-use building projects are emerging under the "Vision 2030" plan for an economic diversification. All this, according to the IIF, should support the demand for real estate.

In the UAE, a reduction in various property purchase charges and a liberalization of the rules applicable to foreign buyers are currently planned. Laws in Abu Dhabi were amended in April to allow the foreign investors in certain zones to have an absolute property ownership. The real estate sector will undoubtedly benefit from a package of measures to support the economy worth CZK 300 billion. The UAE has also introduced a new long-term visa for up to 10 years, which can be requested online. The increase in the number of people staying in the country over a long period of time should contribute to increasing demand for real estate.

Despite the situation in recent years, the UAE is still building up. At the beginning of 2019, the number of completed residential projects increased and a number of large commercial projects were also completed.

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