Keeping up with the regional real estate market takes agility. Markets move, populations shift and people’s needs can change as rapidly as their demographics.
In a sector heavily analysed and commented on, it’s important to stay on top of the issues shaping its immediate future. Here are nine we think deserve the most attention.
Luxury has long been the moneymaker for residential property developers. Today, home buyers in the Gulf are looking for more affordable places to purchase. People looking for smaller properties, away from premium locations, means developers need to find a way of meeting that demand. They will need contractors who can adapt to faster, more modular, construction methods and find quality materials that keep build costs down.
People are no longer happy to put up with living on a road with no name, in a house with no number. Agents know it is easier to market properties that benefit from planning and investment which meets the needs of the future community today. That means play grounds, parks, shops and even schools. Just dwellings are no longer enough.
3. Property demand versus final delivery
While there is talk of oversupply in the most active Gulf property markets, some commentators believe it to be exaggerated. Partly this is because headline grabbing projects under-deliver completed square metres. But residential consumers are wary of this shortfall and look for off-plan properties that show signs of real progress. Utilities need to be kept informed too, which means plenty of communication with developers if everything is to be connected by moving day.
4. Developer finance
Banks are no longer the only source of finance for the region’s developers. Or those looking to get on to the property ladder. Developers have become financiers, offering buyers deposit options and phased repayment terms to sell properties off-plan. While this adds to their risk, it is also bringing flexibility. In the meantime, private finance is also entering the market, giving developers with a solid reputation some competitive money options.
5. Energy use
As green building points systems become stricter across the Gulf, lowering a building’s thirst for power will be essential to achieve the best ratings. In both residential and commercial developments finding ways to optimise energy use, or even generate power, is now big business.
6. Regulation changes
With dynamic fast-growing markets come growing pains. Regulators fine tune rules to keep the market in balance, discourage the fast resale of properties and to get more properties into the hands of end users. Staying on top of how things are changing means getting regular updates from government authorities and specialist legal teams.
7. Urban sprawl
Rapid development in the biggest GCC cities has pushed property developers down and out. This means fewer tall towers in tight spaces. Instead, urban sprawl is offering renters and buyers less central new locations, which are more affordable.
Developers in the UAE held their breath when the introduction of 10-year visas was announced in May this year. New visa regulations could spur long-time residents to make a purchase. They may also open up the possibility of expatriates being able to retire in the UAE. The full regulations are not out yet. But the possibility more people may be able to stay for longer is fuelling hope of a surge in home buying. Neighbouring nations will be watching, to see what happens.
9. Working styles
Work life isn’t what it used to be. Changes in the way people do their jobs is driving office design in new directions. Commercial real estate developers need to change too. Grade A office supply remains tight in the region and the big multi-nationals are looking for office space that responds to the needs of the region’s young workforce. Activity-based work environments, hot desks and open spaces tempered by quiet zones are key components in high grade office space.
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