PRESS RELEASE

Media Briefing: Gulf Real Estate Woes Not Just a Question of Supply

For immediate release

January 20, 2020

New research shows that, contrary to conventional wisdom, declining demand has been the key driver behind lower real estate prices, not excess building activity. Reduced domestic demand has resulted from the imposition of significant fiscal controls by governments, made necessary as budget surpluses turned to large deficits once oil prices collapsed in late 2014.

Our Key Findings:

  • Real estate price declines across GCC countries and sectors have averaged around 30% in the past 4 to 5 years.
  • As a result of each government’s reliance on hydrocarbons as a source of revenue, falling oil prices led to large fiscal deficits. On average, there was a swing from a surplus on +11% of GDP in 2013 to a maximum deficit of
    -12% of GDP in 2015/16.
  • Although necessary, fiscal controls in the form of tax and fee increases and spending cuts have taken significant spending power out of the economy. Average non-oil GDP growth in the GCC slowed from 6% in 2013 to 2% in 2018.
  • Real estate markets are especially vulnerable to slower non-oil GDP growth in the GCC due to the high fluidity of the expat population.
    		•

    The author, Dr. Christopher is available to discuss the research and provide on-the-record briefings. Please feel free to contact him on +971 (0) 2 671 1773. His email address is christopher.payne@peninsula-reh.com.

    ABOUT THE AUTHOR

    Dr Christopher Payne is Chief Economist at Peninsula Real Estate. Formerly, he was the chief economic advisor at the Dubai International Financial Centre; and head of research at the Kuwait Institute of Banking Studies. He has also worked at Bloomberg LP, JP Morgan and PriceWaterhouseCoopers (where he qualified as a Chartered Accountant). He has 25 years of experience covering developed and emerging markets, and holds a Bachelor’s degree from Cambridge University, England, and a Doctorate from the London School of Economics.

    ABOUT PENINSULA REAL ESTATE

    Peninsula is an investment and research company that is identifying trends, opportunities and challenges in the MENA real estate market.

     

    Love
    Recent Press
    • ADGM Court Order | Reduction of the Share Premium Account

      ADGM Court Order in relation to Peninsula PLC and the reduction of the share premium account. A Statement of Capital is also included. Full document: https://www.peninsula-reh.com/wp-content/uploads/2025/11/2025-11-12-ADGM-eCourts-Document-Order.pdf Love

      336 Views
      0
    • Peninsula receives In Principle Approval from the ADGM FSRA

      Subject to final FSRA approval, Peninsula aims to become the first internally managed REIT in the ADGM and GCC   Peninsula today announced that it has been granted an In-Principle Approval (IPA) by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM). Peninsula, founded in 2019 and incorporated in ADGM, is […]

      1874 Views
      1
    • Peninsula Real Estate Announces Strategic Investment by Fortinbras Enterprises

      Peninsula PLC today announced a new strategic investment by Fortinbras Enterprises, via its affiliate fund, to support the company’s growth and deepen its impact on the commercial real estate market in Abu Dhabi, the UAE, and GCC. Peninsula Real Estate, founded in 2019 in Abu Dhabi and incorporated in the Abu Dhabi Global Market, is […]

      2755 Views
      0
    Subscribe to Our Research

    Get the latest information and be amongst the first to know and stay updated on the go. Join our mailing list now.