Blair Hagkull, managing director of Jones Lang LaSalle MENA, said the GCC region would achieve in the next 20 years what some of the developed countries could achieve in 100 years.
Speaking at the FT Global Real Estate Conference, Hagkull said the current internationalisation of the region’s real estate sector would continue to gather momentum with the region poised to attract more foreign capital following market consolidation, increased transparency and legislation ensuring protection of investor interests.
Hagkull said the GCC region, which used to invest its capital globally, has undergone a key transformation by providing expertise on top of capital. The region currently has more than $ 1 trillion worth of real estate projects.
A sea change in regulatory environment, increased transparency and liberalisation bodes well for the long term outlook of the property sector, which is attracting more global investors.
He said the GCC region, which is set to double its population in 2030, would need 12 million housing units by 2017 compared to the current five million. "However, right now plans are afoot for the construction of 2.9 million units only. The gap is 2.1 million units. Of this shortfall, 67 per cent would be in Saudi Arabia," Hagkull said.
He said Dubai and Abu Dhabi would continue to be the main drivers of the regional property boom. The rate of growth in Dubai since 2001 has been 33 per cent every year."
According to RichVille Advisory Group, there will be an additional demand on residential units by around 480,000 as Dubai’s population is poised to grow to 2.5 million by 2010. While the expected projects scheduled for completion by 2010 do not exceed 500,000 residential units and since most of these would not be completed by 2008 as scheduled, there will be no room for oversupply and a price drop.
"While we agree with the experts’ interpretation of the available statistics which suggesting some sort of correction or softening in certain real estate segments, we believe that there are several measures and factors that can offset any risk of a market downturn. Our expectation is that the population will actually double over the coming five years, especially once all the ‘specialised free zones’ are completed by 2008 / 2009," RichVille report said.
According to a MEED research, demand for property in Dubai will continue to outstrip supply until 2010, sustaining growth until the end of the decade.
Although supply of residential properties is greater than ever (175,000 new units will be available by 2010), demand is set to outstrip it, with an estimated 181,000 units required by that year, the research said.
