Complex Made Simple

GCC property investment expected to retreat next year

“Governments will continue to spend on development and infrastructure projects, but they will inevitably reduce the level”

The continuing fall in oil prices will reduce the real estate investment in GCC countries during 2016, leading to a decline in government spending and an increase in revenue through taxes, expects a JLL research report.

Commenting on the report, Craig Plumb, Head of Research at JLL MENA, said: “The governments will continue to spend on development and infrastructure projects, but they will inevitably reduce the level of such spending in the medium term, as they are rearranging the spending needs with the reality of declining oil revenues.”

However, Saudi Arabia may witness additional sales next year through the white land tax and landowners are likely to get rid of the lands to avoid paying taxes, reports Argaam.

Over the past 18 months, plunging oil prices and the strength of the dollar led to a reduction of capital flows into the real estate market in Dubai, as foreign investors’ purchasing power fell.