Real Estate Market Commentary 08-Sept-13 to 14-Sept-13

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1 Kuwait Financial Centre Markaz MENA REAL ESTATE RESEARCH Research Highlights: A weekly market commentary Contents Market Commentary Charts to Note Activity Monitor: Dubai, Kuwait, Riyadh - KSA, Dammam KSA Qatar Markaz Research is available on: Bloomberg - Type MRKZ <Go> Thomson Research, Reuters Knowledge ReutersRealEstate.com Nooz Zawya Investor ISI Emerging market Fatima T. Razzouqi Trainee Analyst frazzouqi@markaz.com Venkat Ramadoss ACA, CFA Manager vramadoss@markaz.com Bassam N. Al-Othman Executive Vice President bothman@markaz.com Kuwait Financial Centre Markaz P.O. Box 23444, Safat 13095, Kuwait Tel: Fax: markaz.com Real Estate Market Commentary 08-Sept-13 to 14-Sept-13 UAE: According to a news article real estate agents in Dubai and Abu Dhabi have been reporting a growth in the number of residents taking out mortgages regardless of expectations that the Central Bank may limit borrowing. Cluttons noted a 40% increase Y-o-Y in the number of mortgage valuations it has been asked to carry out over the past year. Cluttons stated that this trend is expected to continue due to the recovering market paired with people looking to escape high rents. Comparatively, Prestige Real Estate revealed that the number of clients looking to buy rather as against rent grew by 20% during the past year. It was also mentioned that this could be a result of residents returning to the housing market as a way of avoiding soaring rents. Abu Dhabi: Ipsos Mori s revealed that Abu Dhabi was rated the fourth top city to work and live in globally. Abu Dhabi recorded a score of 47% in the overall cities index and was only topped by New York, London, and Paris. Additionally, Abu Dhabi ranked as the second best city to do business in, while UAE as a whole placed 26 th on the ease of doing business rankings. The research for Ipsos Mori s rankings was based on an international sample of 18,147 adults in 24 different countries. Saudi Arabian residents voted Abu Dhabi as their top city, whereas residents in both Spain and Italy chose the Emirate as their second choice while Brazilian residents designated Abu Dhabi as their third choice. KSA: Figures from Ministry of Municipal and Rural Affairs revealed that official construction licenses issued recorded a decrease from 112,362 in 2011 to 100,756 in According to the Ministry, Riyadh was permitted the most construction licenses last year with 24,084 licenses amounting to 23.9 of the licenses. Makkah followed with 17,261 licenses granted while the Eastern Province was permitted 16,805 licenses. It was reported that construction activity in KSA saw great developments during the past years specifically in the residential sector which experienced the highest rate of growth. This was attributed to the government efforts to find solutions for citizens housing. Qatar: Global consultants EC Harris reported that cost of construction in Qatar is the highest in the Middle East during The study compared building costs in 47 countries while using the UK as a benchmark. The study found that construction costs across the globe were affected by fluctuations in currency. However, since Gulf currencies closely track the US dollar, the impact of these fluctuations has been limited. The report revealed that Qatar and UAE have been placed in the top 20 most expensive locations to build in. KSA has also followed the trend and continues to move up the cost rankings with inflation growing at an average of 5%. Egypt: Pharos Holding for Financial Investments reported macro scenario in Egypt is conducive for a pick-up in the domestic real estate market. The report mentioned interest rates which have declined by c. 2% since Jun-13, the government stimulus plan to settle EGP 2.2 Bn of contractors dues, the absence of other alternative short term investments, and potential inflationary pressures due to monetary stimulus as the drivers to the market pick-up. Developments sourced from various sources including news portals like Gulfbase, Zawya, Reuters, Bloomberg, Trade Arabia, Business 24/7, Arabian Business, The Peninsula, Gulf News, Property wire, Khaleej Times, Saudi Gazette, KUNA etc and also from published reports of real estate brokers and investment research houses.

2 Charts to note Chart 1 : IPSOS MORI Top Cities (2013) Source: Ipsos Mori, Markaz Analysis Chart 2 : IPSOS MORI Top Cities to Do Business (2013) Source: Ipsos Mori, Markaz Analysis Kuwait Financial Centre Markaz 2

3 Chart 3 : KSA Permits Distribution (2012) Source: Ministry of Municipal and Rural Affairs, Markaz Analysis Kuwait Financial Centre Markaz 3

4 Activity Monitor Dubai Real Estate Transactions (2012 & 2013) Land Transactions Villa Transactions Kuwait Financial Centre Markaz 4

5 Apartment Transactions Source: Dubai Land Department Kuwait Financial Centre Markaz 5

6 Kuwait Real Estate Transactions (2012 & 2013) Private Residential Property transactions Investment Property transactions Source: MOJ, Kuwait Kuwait Financial Centre Markaz 6

7 KSA Real Estate Transactions (2012 & 2013) Riyadh Real Estate Transactions Riyadh Residential transactions Riyadh Commercial transactions Kuwait Financial Centre Markaz 7

8 Dammam Real Estate Transactions Dammam Residential transactions Dammam Commercial transactions Source: MOJ Kuwait Financial Centre Markaz 8

9 Qatar Real Estate Transactions (2012 & 2013) Source: MOJ Kuwait Financial Centre Markaz 9

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