Investors wary of Syrian property market

In a region where property markets are the envy of the world, there is at least one country that is not cashing in on the fun - Syria.

As Syria imposed a food blockade on nearby Lebanon and then denied doing so, a number of analysts started to reflect on what has been a lacklustre performance on part of the Syrian property markets over the last few years.

One would think that Syria would have it all. It is in a region of the world that is economically dominant and filled with property hotspots. The spill-over effect from Dubai has helped the property markets of many Middle Eastern countries, but Syria has largely been avoided by many of the international property investors who have poured money into neighbouring countries.

The main reason for this, in the eyes of many analysts, is the political and economic uncertainty that exists within the boundaries of the country. It actually has more to do with economic uncertainty than political uncertainty, since many of the countries within the Middle East are not democratic.

However, in Syria, uncertainty permeates throughout the economic and judicial systems, and that tends to make property investors very nervous indeed. Combine that with the fact that over a million Iraqi refugees have come across the border into Syria in the last five years and driven up property values through over-inflated demand, and the situation is not one that many property investors want to face.

But the picture is bleaker than even that would imply. The major part of the Syrian economy is their oil production, and that is expected to decline by a very significant amount in the next two years as oil reserves within the country begin to dry up.

Without that major sector of the economy (which currently accounts for about 40% of the exports out of Syria), and in the wake of United States sanctions on the country, the economy in Syria appears to be headed in a downward direction and that once again makes investors wary of putting their money into the Syrian property market.