Saudi Crown Prince, Italian PM Meloni discuss regional security in phone call    Musaned tops 2024 Beneficiary Satisfaction Index among 39 platforms with a rate of 96%    Saudi Arabia launches loan guarantees for SMEs to stimulate investment in environmental projects    Dr. Soliman Fakeeh Hospital, Jeddah is among top three 5-star hospitals in Middle East and North Africa    Antenna: Saudi artist Ahmed Mater opens first solo exhibition in China    79 hospitality facilities in Makkah and Madinah face penalties for closure order violations    S&P upgrades Saudi Arabia's credit rating to A+    Trump orders 'decisive' military action against Houthis in Yemen    US Senate passes Republican spending bill to avert government shutdown    Zelenskyy says territorial control key to peace talks, rejects recognition of occupied regions    Pakistan says train hijacking death toll rises to 30, accuses India and Afghanistan of supporting militants    Al Nassr climbs to third with dominant win over Al Khaleej, Al Qadsiah slips after loss to Damac    CEDA reviews role of reforms in diversification of economy and surge in non-oil revenues    Crown Prince receives Yazeed Al-Rajhi after historic Dakar Rally 2025 victory    Saleh Al-Shehri's late penalty rescues Al Ittihad against Al Riyadh    SR17 million fines slapped on 16 individuals and companies convicted of violating Capital Market Law    Grand Mufti rules against posting prayers and preaching in mosques on social media    Man lives for 100 days with titanium heart in successful new trial    Argentinian court begins trial of seven healthcare professionals over Maradona's death    Singer Wheesung who wooed Korea with his ballads, found dead at 43    Prince Frederik of Luxembourg dies from rare disease    King Salman prays for peace and stability for Palestinians in Ramadan message King reaffirms Saudi Arabia's commitment to serving the Two Holy Mosques and pilgrims    Bollywood star Saif Ali Khan 'out of danger' after attack at home in Mumbai    Order vs. Morality: Lessons from New York's 1977 Blackout    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Gulf's real estate market outlook negative: Moody's
By Saudi Gazette Staff
Published in The Saudi Gazette on 25 - 04 - 2009

The outlook for the Arabian Gulf real estate market for 2009 is negative, reflecting tightening access to funding, declining demand and a need to preserve cash, said Moody's Investors Service in a new report entitled “Arabian Gulf Real Estate Market Industry Outlook”.
However, Moody's noted that public infrastructure spending remains buoyant on the back of economic stimulus packages, which have been bolstered by government surpluses accumulated during the period of high oil prices. Furthermore, most real estate companies in the region benefit from strong government support, which in turn underpins their ratings.
Moody's expects such high levels of support to continue.
“Although drivers of demand vary considerably among the Gulf Cooperation Council (GCC) countries, residential and commercial real estate are under pressure due to lower demand, lack of funding, worsening consumer sentiment and risk of over-supply,” said Martin Kohlhase, assistant vice president-analyst in Moody's Corporate Finance Group.
“Saudi Arabia is the notable exception as it benefits from a large and growing indigenous population base and structural under-capacity for residential property, especially for low- and middle-income families.”
Moody's noted that obtaining financing has become more challenging since September 2008 and a nascent mortgage industry cannot fully compensate for a funding shortfall from other sources. Negative market sentiment has also kept away many buyers who are no longer willing to acquire off-plan property (or the capacity) and thereby provide a source of funding through down-payments.
“Furthermore, long-term population growth rates - in excess of 5 percent for most countries in the region - are no longer realistic in the short term and may become negative over the coming quarters as investments in commercial activities, including foreign direct investments, are drying up,” Kohlhase added.
Companies have also started to lay off foreign employees, which could negatively impact demand for residential properties, as some markets appear to be over-supplied.
Moody's believes that the advanced markets (Dubai and Doha) will be impacted the most as expansion plans in these markets have assumed a steady influx of expatriates. Instead, these markets have witnessed a decrease in property prices and a slowdown in construction activity. Moody's further said many projects, particularly in Dubai, have been undertaken in anticipation of future demand, which may not materialize.
Moody's also understands that real estate companies have generally put the majority of planned, but not yet commenced, projects on hold, whilst completing or consolidating those where construction has started.
Completed but unsold projects will have to remain on the balance sheet.
Moreover, companies with (uncommitted) short-term bank lines which are more common in the Gulf region than in more mature markets may face increased refinancing risk.
Moody's currently rates seven companies in the GCC region that have real estate-related activities.
Some are conventional developers, whilst others operate free zones or cater largely to a certain industry. The majority are government


Clic here to read the story from its source.