Confidence in the property market in the Gulf region is at an all time low and is holding back a real estate recovery, according to a new poll.
Restoring investor confidence is the key to seeing the GCC’s real estate sector emerge from the battering it has received from the current global economic crisis, the poll for Arabian Business shows.
The online survey asked readers what factors they saw as important in holding back a recovery in the Gulf’s property market. Investor confidence was the number one factor for 41% of respondents who believed it was still at an all time low, especially in the United Arab Emirates.
The poll echoes other findings. The most recent GCC Investor Sentiment Index from Shuaa Capital showed a 2.7% improvement in August compared to July although it was still below the level recorded in June.
The AB poll showed that the UAE and Qatar were the main drivers in the improvements seen in the Index with the UAE up 4.3%, with 17% of investors responding positively about the current state of the country’s economy.
Another 36% of the hundreds of people who took part in the poll said it is prices that are still holding back the property recovery in the region. They said that despite huge drops in both house prices and rental values, up to 50% in some areas since their peak in 2008, prices still had a way to fall and investors were waiting for this before buying.
A lot depends on how the economy performs. The UAE’s Minister of Economy said he expects the economy to be back on track by the final quarter of 2009, but investors don’t necessarily agree. Some 2% said that they blame the actions of banks for adding to the problems relating to the global downturn. While 11% said their lending policies were too strict and they needed to be more flexible while another 12% believe that they are keeping mortgage rates far too high.