Most real estate investors in Dubai plan to hold onto their assets as interest moves to North Africa

Only about a fifth of investors plan to sell their property, equal to those that plan to buy, suggesting equilibrium among buys and sellers in the Dubai market, says the Real Estate Investor Sentiment Survey by Jones Lang LaSalle.
 
‘Results from this survey indicate that the Dubai market has an equal number of potential buyers and sellers, a change from the sentiment six months ago when buyers outnumbered sellers by around 8%,’ the report points out.
 
The report shows that overall the desire to hold onto property assets has decreased across the majority of markets in the Middle East and North Africa (MENA) region and range from 52% in Dubai to 14% in Egypt and decreasing by nearly 10% over the last sixth months.
 
This may be due to the fact that markets have started to enter the consolidation phase and products meeting the requirements of buyers are trading more freely, the report suggests.
 
It also suggests that the expectations that MENA markets are either close to bottoming out or have started to recover is reflected in the general improvement in sentiment. The future real estate performance in all markets across the region except the UAE is perceived as being more positive than six months ago.
 
‘Although Dubai continues to show a negative net balance, sentiment has improved by over 70% compared with April 2009, when uncertainty was at its peak for Nakheel and its parent company Dubai World. Since restructuring initiatives were announced by the government however, sentiment towards Dubai has remained relatively stable, underlining the improved confidence of investors and the ease of the market as compared to other regions,’ it says.
 
However, investment sentiment towards the Abu Dhabi market has weakened over the past six months, driven by a general slowdown in the economy, continued tight liquidity and the inter-relationship with the Dubai market.
 
Nevertheless, it suggests that the future prospects for the Abu Dhabi market remain bright, driven by a number of factors. ‘The outlook for oil prices and productivity remain positive, driving GDP and generating revenue surpluses that can partially be re-invested into the economy in the medium term. The weight of sovereign and private wealth, combined with the government's commitment to economic development and infrastructure will ensure that Abu Dhabi's real estate markets will recover over time,’ it says.
 
Saudi Arabia is regarded as the market most likely to see price increases over the next 12 months, although this has decreased slightly compared to the October 2009 survey. The other MENA markets where most investors expect to see growth in real estate values over the next year include Egypt, Levant, and North Africa.
 
There is also a move as positive sentiment in the region has shifted northwards, away from the GCC and towards North Africa. ‘This is reflected in the high build/buy levels indicated and the resulting opportunities to either develop new product or purchase existing stock in these more populous and less mature markets,’ it says.
 
‘It appears that investors are less focused on the GCC region, with the exception of Saudi Arabia, and are actively seeking opportunities in other real estate markets for diversification purposes,’ it adds.