x
By using this website, you agree to our use of cookies to enhance your experience.
STAY CONNECTED!
    
newsletter-button

TODAY'S OTHER NEWS

Middle East's housing markets losing steam

Of the four Middle Eastern housing markets included the latest Global Property Guide survey, all, except UAE, performed worse in the second quarter of this year than the previous year.

Two countries saw modest house price growth during the year to the second quarter of 2016, while the other two experienced sharp declines in house prices.

Property in Israel

Israel's housing market is softening sharply, amidst economic slowdown. The nationwide average price of owner-occupied dwellings rose by 3.29% during the year to Q2 2016, a slowdown from a year-on-year increase of 7.66% a year ago and the lowest annual increase since Q1 2014. House prices actually dropped 1.8% quarter-on-quarter in Q2 2016.

Demand is also waning. After a more than 40% growth in 2015, new dwelling sales increased by just 3.7% y-o-y to 8,292 units in the first three months of 2016, according to the Central Bureau of Statistics (CBS). The number of new dwellings for sale increased 1.7% to 26,725 units in March 2016 from a year earlier. Dwelling starts rose by 3.9% y-o-y to 47,746 units in 2015 while dwelling completions dropped 2.8% to 43,399 units over the same period.

Israel's economy grew by an annualized rate of 3.7% in Q2 2016, from 2.2% in the previous quarter, amidst strong private consumption and fixed asset investment. The economy is expected to expand by 2.4% this year, after growing by 2.6% for both 2014 and 2015, 3.3% in 2013, 2.9% in 2012, and 5% in 2011, according to the Bank of Israel. The Bank of Israel kept its benchmark interest rate at a record low of 0.1 in August 2016, in an effort to boost economic growth while maintaining price and financial stability.

Demand is also waning. After a more than 40% growth in 2015, new dwelling sales increased by just 3.7% y-o-y to 8,292 units, according to the Central Bureau of Statistics (CBS). The number of new dwellings for sale increased 1.7% to 26,725 units in March 2016 from a year earlier. Dwelling starts rose by 3.9% y-o-y to 47,746 units in 2015 while dwelling completions dropped 2.8% to 43,399 units over the same period.

Property in Qatar

Qatar’s property market is now weakening rapidly, amidst economic slowdown. The nationwide real estate price index rose by a meager 1.29% during the year to Q2 2016, sharply down from y-o-y rises of 9.38% in Q1 2016, 10.76% in Q4 2015, 16.3% in Q3 2015, 21.47% in Q2 2015, and 27.81% in Q1 2015. Property prices fell by 3.84% q-o-q during the latest quarter.

Property demand in Qatar remains strong in the first six months of 2016 after the value of real estate transactions reached an all-time high in 2015, boosted by sustainable economic and population growth, and a construction boom in preparation for the 2022 FIFA World Cup. The economy is expected to expand by a modest 3.4% this year, after growing by an annual average of 4.2% in 2012-15, and 15.7% in 2008-11, according to the IMF.

Property in Dubai

Dubai’s residential property prices plunged by 5.79% during the year to Q2 2016, from a y-o-y decline of 11.72% in Q2 2015 and its sixth consecutive quarter of annual declines. House prices fell by 0.63% during the latest quarter.

Dubai's property market has been one of the world's most volatile. Dubai saw one of the world's worst housing crashes from Q3 2008 to Q3 2011 with house prices plunging by 53%. The market started to recover in 2012, with double-digit house price increases from Q2 2012 to Q4 2014. However, the property market started to slow in the second half of 2014, amidst housing oversupply, subdued demand and slower economic activity.

The total number real estate transactions rose by 22.8% y-o-y to 28,251 units in the first half of 2016 while the value of transactions dropped 12.4% to AED113 billion (US$ billion), according to Dubai Land Department. Around 48,000 units are expected to be delivered into the market from 2016 to 2018, according to CBRE.

House prices in Dubai are expected to fall further by 10% this year, amidst weaker investor sentiment and weak economic growth, according to Standard & Poor's.

UAE's economic growth is projected to slow to 2.4% this year, after GDP growth of 3.9% in 2015, 4.6% in 2014, 4.3% in 2013, 7.2% in 2012 and 4.9% in 2011, according to the IMF. This is due to lower oil prices, slowing Chinese economy and looming regional public spending cuts.

Property in Egypt

Egypt is now the second worst performer in our global house price survey, with the nationwide real estate index plunging by 11.2% during the year to Q2 2016. This is in sharp contrast with the rise of 0.9% in the same period last year. House prices plunged by 15.44% during the latest quarter.

Egypt's economy grew by 4.2% in 2015, the highest growth in 5 years, on the back of a political environment which is apparently more stable due to high levels of political repression, large donations from Gulf Cooperation Council (GCC) allies and improving business sentiment, according to the IMF. Economic growth is projected to slow to just 1.2% this year, its weakest in 7 years, because of the cumulative impact of low oil prices and government spending cuts.

In an effort to buoy the property market, President Abdel Fattah el-Sisi ratified Law 17/2015, removing the last remaining restrictions on foreign ownership of land and property in Egypt, and introduced rules allowing the government, the biggest landowner in Egypt, to contribute land to the private sector as part of public-private partnership schemes against a share of the revenue.

For the latest detailed housing market analysis of individual regions and countries, check out the Global Property Guide's global survey for Q2 2016. 

icon

Please login to comment

Zero Deposit Zero Deposit Zero Deposit
sign up