Posted in Construction, on July 5, 2020, Further cuts to MENA construction sector expected for 2020 as the region appearing to be hit with a triple whammy, per GlobalData, would sound in our opinion as a realistic assessment at this conjecture of the construction industry in the MENA.
The Middle East and North Africa (MENA) construction sector is expected to be bit by the triple whammy of lower oil production, low oil prices and contracting non-oil sectors. Leading data and analytics company GlobalData has further cut its construction output growth forecast for the region for 2020 to -2.4%, down from the previous forecast of 1.4%, in light of continued spread of COVID-19.
Yasmine Ghozzi, Economist at GlobalData, comments: “Construction activity for the remainder of 2020 is set to see poor performance. While there is usually weak construction activity in the holy month of Ramadan and during the hot summer months of June, July and August, this is usually compensated by strong performance at the beginning and end of the year. However, this will not be the case this year due to the strict lockdown policies that extended until the end of May.
“The sector is expected to face headwinds in 2021 with a slow recovery, but the pace of this will be uneven across countries in the region. Fiscal deficits and public debt levels will be substantially higher in 2021. Fiscal consolidation will hinder non-oil growth across the region, where governments still play a considerable role in spurring domestic demand.
“In addition, public investment is likely to be moderate, which will translate into fewer prospects for private sector businesses to grow – especially within sectors such as infrastructure. Expected increase in taxes, selected subsidy cuts and the introduction of several public sector service charges will influence households’ purchasing power, having a knock-on effect on future commercial investments.”
Amid the worsening situation with regards to the COVID-19 outbreak and the decline in oil prices, GlobalData has further cut its forecast for construction output growth in Saudi Arabia to -1.8% from its previous forecast of 2.9% in 2020 and expects a recovery in the sector of 3.3% in 2021. The government’s decision to host limited annual ten-day Hajj entails a possible loss of estimated revenue at more than US$10bn, adding more pressure on the Kingdom’s economy.
Ghozzi adds: “GlobalData has estimated a contraction of 2.1% in construction output growth in the UAE but expects a rebound in 2021 of 3.1%. In one of the largest global energy infrastructure transactions, Abu Dhabi National Oil Company (ADNOC) raised US$10bn by leasing a 49% stake in its gas pipelines for 20 years. This landmark deal is important especially during the prevailing industry downturn in order to keep profitability.
“GlobalData has also cut further the growth rates for Qatar, Kuwait and Oman in 2020 to -3.4%, -7.8% and -8.1%, respectively. Qatar’s economy this year will be affected by decline in tourist arrivals, low consumer spending and low oil prices. Nevertheless, strong fiscal stimulus and spending on infrastructure projects should provide support.
“The negative outlook for Kuwait is weighed down by lower oil prices and the prospect of a higher fiscal deficit, possibly compromising the government’s capital spending on construction and infrastructure. Business unfriendliness constitutes a barrier to reforms in the Kuwaiti economy; the extensions in tenders’ deadlines compounded by an inflexible bureaucratic procurement setup that slows decision-making will delay progress for several Kuwaiti megaprojects.”
Egypt’s construction sector is set to continue performing well despite poor performance of the non-oil sector in April. GlobalData expects construction to grow at 7.7% in 2020, slowing from 9.5% in 2019, given a short-term slow down due to the pandemic and 8.9% in 2021, and to continue maintaining a positive trend throughout the forecast period. In the Arab Maghreb, GlobalData has further cut forecasts for construction growth in Tunisia, Morocco and Algeria to -3%, -2.1%, and -2.5%, respectively, in 2020 and 0.7%, 1.2% and 1.9%, respectively, in 2021.
GlobalData has a bleak view of Iran’s construction sector throughout the forecast period. A slowdown in economic activity caused by the virus outbreak and a possible wave of further US sanctions (in the event Trump wins a second term) will continue to wreak havoc on its economy, and drastically affecting construction activities.
Once considered a farfetched possibility by skeptics, global warming and climate change are now surfacing as palpable realities of the day. From wildfires in Australia to melting glaciers in Iceland, the year 2020 bid farewell to the hottest ever decade recorded on the planet. Fortunately, though, measures are being taken across all industries to curb our modern world’s carbon footprint, and the case of building and construction sector is no different.
According to a recent UNEP-supported report titled 2019 Global Status Report for Buildings and Construction, construction sector in 2019 continued its notorious position as the largest contributor of greenhouse gas emissions, resulting in 39% of the energy and process-related carbon emissions recorded during the year. The report further states that whilst as many as 136 countries have expressed intentions to work towards sustainable buildings, only a few have elaborated on tangible actions strategized to achieve such plans.
The global building stock is forecasted to grow twofold by 2050 as a direct consequence of increasing urbanization. If left unchecked, GHG emissions resulting from the building industry can rise to 50% of the global carbon emissions in the next three decades. While technological innovations have given way to reduced energy consumption, increasing cooling demand emerging from hot regions have overshadowed a significant positive trajectory. That said, countries across the world are increasingly targeting the urban built environment as a part of their national strategy towards a low-carbon future.
Within the Middle East and North Africa (MENA) region, Qatar houses one of the highest collections of sustainable buildings. Concluding 2019, the country saw completion of more than 50 projects certified under the Global Sustainability Assessment System (GSAS) – MENA’s first performance-based assessment system for green buildings. Based on their overall sustainability credentials, projects registered under GSAS can achieve up to 5 Stars, representing the highest levels of sustainable features in terms of design and build. The award of final rating and certificates follows a comprehensive process whereby auditors from the Gulf Organisation for Research & Development (GORD) analyze several aspects of projects at multiple stages throughout the construction phase.
For the year 2019, here are some green projects successfully completed under GSAS.
During 2019, many recipients of outstanding sustainability ratings were linked with Qatar Rail’s Doha Metro project. With Mesheireb Station achieving the highest rating of 5 Stars, another 17 metro stations and 2 stabling yards at different locations within Doha received 4 Stars for their environmentally friendly design and build aspects. Doha Metro is by far the world’s first metro project with accredited sustainable certification specific to rating railway stations. This has been achieved through GSAS’ unique Railways Scheme that is used for rating the sustainability and ecological impacts of new main station buildings, including spaces that serve various functions of a metro station. According to Consolidated Contractors Company, sustainability of the project has been achieved through responsible site development, water saving, energy efficiency, materials selection, cultural and economic value support and innovation in design. Stations awarded GSAS accreditation during 2019 included those located in Msheireb Downtown, Ras Bu Abboud, Al Sadd, Al Sudan, Bin Mahmoud, Qatar University, Hamad International Airport Terminal 1, Al Doha Al Jadeda, Umm Ghuwailina, Ras Bu Fontas, Economic Zone, Al Wakrah, Al Bidda, Corniche, Hamad Hospital, Al Riffa, The White Palace and Education City.
Lusail City Projects:
A number of projects receiving green certifications during 2019 represented Lusail City – Qatar’s first smart city covering 38 square kilometers, that has mandated GSAS to ensure sustainability of all of its buildings. A flagship project of Qatari Diar, Lusail City has been dubbed as the “largest single sustainable development” ever undertaken in the State of Qatar. Use of native flora and water efficient landscaping mechanisms are some ways the city conserves water. Its integrated transport system reduces GHG emissions resulting from private vehicles. The city’s urban connectivity has been achieved through light rail, ample pedestrian walkways, bicycle tracks and park-and-ride facilities at the public transport stations. With a capacity to reduce up to 65 million tons of CO2 per annum, Lusail’s district cooling plant boasts of being one of the largest in the world. Other green credentials benefiting the entire city include a pneumatic waste collection system, sewage treatment plant and an interconnected natural gas network designed to cut down energy consumption.
Within Lusail, Marina Yacht Club Al Khaliji Tower received the highest sustainability rating of 4 Stars during 2019 followed by another 8 commercial, residential and mixed-use developments receiving 4, 3 and 2 stars. Once complete, the city will have the capacity to accommodate 200,000 residents, 170,000 employees and 80,000 visitors without significant impact on the environment.
Sustainable development is one of the four key pillars of Qatar National Vision 2030, a fact that has provided a natural impetus for public projects to be designed and constructed sustainably. Now, all government projects within Qatar are now mandated to pursue and achieve sustainability under GSAS certification system. To this end, health centers in Al Waab, Al Wajbah, Muaither and Qatar University were successfully completed with 3 Stars sustainability rating during 2019 under the supervision of Public Works Authority ‘Ashghal’. Interestingly, all projects undertaken by Ashghal have been designed and built following sustainability principles – a fact that has been reiterated by Ashghal’s President, Dr. Eng. Saad bin Ahmad Al Muhannadi, who recently emphasized that “Ashghal is implementing GSAS standards in all its public buildings in Qatar, specifically in educational and health buildings.” In the light of these comments, one can safely assume that the upcoming stock of health centers in Qatar will continue to have sustainability at the core of their design and construction.
Hamad Port Project Facilities:
Increasing Doha’s total port capacity, Hamad Port Project started operations in 2016. However, construction has been underway to develop new facilities aimed at enhancing the port’s functional efficiency. The year 2019 witnessed completion of multiple facilities inside the new port with sustainability certification. From accommodation and mosques to civil defense and business center buildings, 19 projects under the umbrella of Hamad Port received sustainability rating between 3 and 2 Stars. Development of the new port has followed comprehensive mechanisms aimed at preserving the environment. For instance, 39,117 mangroves, 14,252 sqm of sea grass and 11,595 hard corals were relocated prior to the construction phase. The relocated flora and fauna are being continuously monitored and have so far proven to be surviving.
Taking green sports infrastructure to another level, Al Janoub Stadium received GSAS 4 Stars during 2019, and rightly so. Soon to be a venue for FIFA 2022 World Cup games, the stadium consumes 30 percent less water in terms of international plumbing codes. More than 15% of its permanent building materials are made from recycled content and more than 85% of the waste generated during construction was processed to be reused or recycled, making it one of the most sustainable stadiums worldwide. Apart from Al Janoub, Qatar University’s Sports and Events Complex was another distinguishing project that received 4 Stars under GSAS Design & Build scheme.
Middle Eastern buyers surge to third place in the UK’s country house £5 million+ buyer rankings, just behind UK and European buyers who maintain their positions in first and second place, according to Knight Frank.
Analysis of purchaser data confirms that 2019 saw a tripling in the market share taken by Middle Eastern buyers in the £5 million+ country market compared to their share in 2018
This makes them the third largest source of international demand
Brexit went official last month, which could cause a shift in spending habits
Middle Eastern buyers surge to third place in the UK’s country house £5 million+ buyer rankings, just behind UK and European buyers who maintain their positions in first and second place, according to Knight Frank.
Analysis of purchaser data confirms that 2019 saw a tripling in the market share taken by Middle Eastern buyers in the £5 million+ country market compared to their share in 2018, making them the third largest source of international demand. This was followed closely by near doubling in the share of purchases taken by European buyers, who upheld their second place position in the country house buyer rankings.
Although dropping slightly in 2019, UK buyers maintained their position with the largest share of the prime country market responsible for nearly six in ten purchases.
Henry Faun, Head of London International Project Sales at Knight Frank Middle East, said:“The attraction of private education options is particularly significant to Middle Easterners seeking to place their children in the UK education system. Areas in close proximity to London, such as North Surrey, have been extremely popular with Middle Eastern buyers. The many respectable international schools, combined with easy access into London, makes the Surrey area particularly attractive to buyers from the Middle East looking to settle in the UK.”
Rupert Sweeting, Head of National Country Sales at Knight Frank, said:“Although the dip in UK buyers can be explained by the concerns over the general election and Brexit that clouded 2019, international purchasers still consider the UK as politically stable and are confident in the country’s long term growth prospects – despite stamp duty taxes.”
An IMF blog article by Deniz Igan dated February 12, 2020, holds that Construction Activity Can Signal When Credit Booms Go Wrong. This state of affairs seems to apply almost universally. Indeed, as per the French saying “when the building goes, everything goes,” it appears that it took time for the international financial institution to reach this conclusion, especially with regards to the countries of the MENA region.
In Spain, private sector credit as a share of GDP almost doubled between 2000 and 2007. This increase was accompanied by a boom in housing prices—which doubled in real terms over the same period. The economy as a whole also grew at a record pace.
But then in 2008, Spain’s credit bubble burst, and with it came loan defaults, bank failures, and a prolonged economic slowdown.
A less-noticed development in Spain was in the construction sector, where employment grew by an astounding 47 percent, compared to the economy-wide increase of 27 percent.
New IMF staff research, based on a large sample of advanced and emerging market economies since the 1970s, shows that long-lasting credit booms that featured rapid construction growth never ended well.
New evidence on credit booms
Rapid credit growth—known as “credit booms”—presents a trade-off between immediate, buoyant economic performance and the danger of a future crisis. The risk of a “bad boom”—where a rapid credit growth episode is followed by a financial crisis or subpar economic growth—increases when there is also a boom in house prices.
Long-lasting credit booms that featured rapid construction growth never ended well.
Our research shows that the experience with the dangerous combination of credit booms and rapid expansion in the construction sector goes beyond the Spanish borders and extends to time periods not related to the global financial crisis.
We find that signals from construction activity may help to tell apart the dangerous booms, which need to be controlled, from the episodes of buoyant but healthy credit growth (“good booms”).
Credit booms do not lift all boats alike
During booms, output and employment expand faster. But not all sectors behave the same. Most of the extra growth is concentrated in a few industries—specifically, construction and, at a distant second, finance.
However, the same industries that benefit the most during booms experience the most severe downturns during busts. This implies that credit booms tend to leave few long-term footprints on a country’s industrial composition.
Construction is special
Construction is the only sector that consistently behaves differently between good and bad credit booms. On average, output and employment in the construction sector grow between 2 and 3 percentage points more in bad booms than in good ones. In all other sectors, the difference is smaller and not significant (except trade, but only when it comes to output growth).
What makes construction special? Construction does not have the growth potential of many other industries. In other words, too much investment in construction may divert resources away from more productive activities and result in lower output.
Also, the temporary boost in construction employment and the relatively low level of skills needed may discourage some workers from investing in their education and skills. This may have long-lasting effects on output after the boom ends.
Finally, construction projects have large up-front financing needs, and final consumers of the product (for example, houses or hotels) also tend to borrow to finance their purchases. As a result, debt may increase significantly more during booms led by construction.
The predictive power of construction activity
An unusually rapid expansion of the construction sector helps flag bad credit booms. A 1 percentage point increase in output and employment growth in the construction sector during a boom raises the probability of the boom being bad by 2 and 5 percentage points, respectively.
Construction growth is also a strong predictor of the economic costs of bad booms than other variables. A 1 percentage point increase in output growth in the construction sector during a bad boom corresponds to nearly a 0.1 percentage point drop in aggregate output growth during the bust.
If policymakers observe a rapid expansion in the construction sector during a credit boom, they should consider tightening macroeconomic policies and using macroprudential tools (such as higher down payments for mortgages).
In some cases, policy action will be triggered by other indicators, such as house prices or household mortgages. Sometimes, however, these other indicators may not sound the alarm (for example, because the construction boom is financed by the corporate sector or by foreigners), yet risks accumulate. Then, unusually rapid growth of construction could give a signal, for instance, to impose limits on banks’ exposure to real estate developers and other construction firms.
Finally, given that data on output and employment in the construction sector are often available with a few months’ lag, higher-frequency indicators such as construction permit applications could act as valuable signals. Construction indicators should also be included in models that assess risks to future economic activity.
It is no surprise that in this article (see below) of ConstructionWeekonline, there is no hint anywhere that Indians, Pakistanis most interested in UAE property investments make up the most significant percentage of the populations of the respective GCC countries.
Since the advent of oil, the Persian Gulf countries have generally turned into modern states through concurrent processes of development. Rapid population growth in the GCC states has been timed by 10 at least, in the space of few decades through primarily a natural growth in the influx of foreign workers and not through their indigenous population.
It must also be noted that the same countries planning ahead are believed to be somehow facilitating investments of non nationals in any segment of their economies, presumably to counter all those consequences of oil peaking shortly and away from the Gulf region.
Of the top five most active nationalities on Dubizzle Property, the highest interest in the UAE property market came from Indian nationals, accounting for 22% of visits to the platform in 9M 2018.
Indians and Pakistanis are most interested in UAE property investments, Dubizzle said [representational image].
o EThis data echoes figures from Dubai Land Department (DLD), where Indian nationals accounted for more than 4,600 investments worth AED 8.6 billion in the first nine months of this year, representing the largest property investment segment in the UAE.
Pakistanis came in second with 14% of visits to dubizzle Property, followed by Egyptians (6 per cent), Jordanians (4 per cent) and UK nationals (4%).
Egyptians and Jordanians are the top Arab nationalities looking to invest in the UAE property market, according to dubizzle Property.
The two nationalities accounted for 10 per cent of property seekers on the platform in the first three quarters of the year.
This is in line with the figures recently revealed by the Dubai Land Department (DLD) concerning Dubai real estate transactions during the same period, where Jordanians were identified as the highest Arab investors with 644 investments by 548 investors, worth over AED 1.2 billion. Egyptians recorded 719 transactions made by 623 investors, worth over AED 1 billion.
China, France, UAE, and KSA were among the top 20 most active users of the platform, which is also in line with the DLD’s list of top 10 investors by nationality that includes UAE, India, KSA, UK, Pakistan, China, Egypt, Jordan, and France.
“The current soft sales market has made the cost of property ownership more attractive versus the cost of rent, especially for those considering staying in Dubai for five years or more. Long-term expats are increasingly making the leap into ownership as declining prices are now making this investment possible,” commented Matthew Gregory, head of property sales at dubizzle Property.
Today isWorld Cities Day 2018and it is hosted by the city of Liverpool, UK and the event is being jointly organised with UN-Habitat and the Shanghai People’s Government.
The event is being attended by mayors, national and local government experts, representatives from global partnerships and coalitions and academics from Africa, Asia, Europe, Latin America, the Middle East, and the USA. Panel sessions and seminars will give cities opportunities to exchange knowledge and best practices and focus international attention on sustainable urbanization.
In the meantime, here is a picture of what is going on in the world.
UN-Habitat/Julius Mwelu Cities in developing countries like Nairobi in Kenya continue to grow rapidly.
The migration of some 1.4 million people every week to cities around the world “can strain local capacities, contributing to increased risk from natural and human made disasters’” according to the United Nations Secretary-General António Guterres.
In his message for World Cities Day, celebrated annually on 31 October, Mr. Guterres stressed that “hazards do not need to become disasters.”
“The answer is to build resilience – to storms, floods, earthquakes, fires, pandemics and economic crises,” he said.
Mr. Guterres explained that cities around the world are doing just that, forging new ways to increase resilience and sustainability.
The capital of Thailand, Bangkok has built vast underground water storage facilities to cope with increased flood risk and save water for drier periods.
In Quito, the capital of Ecuador in South America, local government has reclaimed or protected more than 200,000 hectares of land to boost flood protection, reduce erosion and safeguard the city’s freshwater supply and biodiversity.
The UN chief also indicated that the city of Johannesburg in South Africa “is involving residents in efforts to improve public spaces so they can be safely used for recreation, sports, community events and services such as free medical care.”
World Cities Day was established by the UN to promote the international community’s interest in global urbanization, push forward cooperation among countries in meeting opportunities and addressing challenges of urbanization, and contributing to sustainable urban development around the world.
Maimunah Mohd Sharif, Executive Director of the UN Human Settlements Programme (UN Habitat), flagged the importance of investing in resilience or face growing “economic, social, political and human” risks.
“It has been estimated that without action on climate change – which accounts for just one facet of resilience – some 77 million urban residents risk falling into poverty,” she warned, elaborating that human-made and environmental threats ranged from droughts, floods and fires to economic shocks, disease outbreaks, war and migration.
“Investing in resilience is a wise investment,” the UN Habitat chief said.
The theme of this year’s commemoration, Building Sustainable and Resilient Cities, focuses on the need to preserve human life and limit damage and destruction while continuing to provide infrastructure and services after a crisis.
British nationals have invested US$8.47 billion (AED31.1 billion) in Dubai’s real estate during the last four years (2014-2017), according to the statistics released by Dubai Land Department, DLD. The United Kingdom is one of the largest investment source markets for Dubai’s real estate.
Following the Brexit vote in 2016 and subsequent move for separation from European Union by the British Government, Britain has witnessed a massive outflow of capital towards outbound investment.
“Sustained investor appetite for European real estate led to a 22 percent increase in volumes during 2017, with all European regions registering growth,” Jones Lang LaSalle, an investment management company, said in a latest report.
Besides, the sound regulatory environment and solid foreign investor protection makes Dubai an ideal market for investment for British investors and other foreign investors in Britain who want to invest their money in a more stable and higher-yield market and the UAE fits the bill.
A number of UAE property developers have tried to reach out to British home buyers and investors, by setting up offices and appointing brokers to promote Dubai’s real estate in the UK, especially in key cities of London, Manchester and other centres.
The International Real Estate and Investment Show, IREIS, is also set to bring the biggest international names in the real estate and investment industry to London with IREIS 2018 – UK Edition. To be held at one of the prime locations of London City “The Queen Elizabeth II Centre”, Westminister from 22nd-23rd June, 2018, the show serves as a one-stop shop for UK investors who are seeking for the perfect investment opportunities in the UAE.
Organised by DOME Exhibitions, the IREIS 2018 – UK Edition will host a spectrum of property developers, investment and real estate brokerage companies which will showcase the latest offers across the seven emirates and around the world.
“UAE thrives with its low tax environment, world-class infrastructure and 100 percent ownership prospects for foreign investors in selected zones, the UAE has rapidly risen as one of the most sought-after choice among foreign investors,” Antoine Georges, Managing Director of DOME Exhibitions, said.
“With the upcoming Expo 2020 Dubai ahead, the country is expected to possess such key drivers that will uphold a healthy outlook for the real estate market, further cementing its position as the top tourism and business hub in the world. Several government initiatives had also been launched to fast-track investors’ transactions within the country, with the Dubai Land Department reducing transaction period to 10 days.
“The UAE holds exactly what British investors look for in each venture: high quality real estate with a promising return on investment. This opportunity, combined with a prosperous economic growth and stability are vital drivers to the UAE’s increasing investors’ base.”
A study of 2 suburban districts of Casablanca, Morocco is believed to be a first comparison “Match” between Bouskoura and Darbouazza as recently undertaken by JUMIA House.
A report in French of the real estate analysis with graphics (see below) and comparative results was realised by Ranya S. Alaoui, Head of Communications & PR, Phone MA:0664604708, Skype ranya_alaoui, email@example.com and released to the press together with a market analysis of JUMIA House General Manager Mr. Clément Tesconi on February 21st, 2017.
Here are below some excerpts of the report titled :
JUMIA House publishes a first comparison “Match” between Bouskoura and Darbouazza.
The main results of the study (see graphics and press release for more details) are in a nutshell :
More expensive purchase at Dar Bouazza than in Bouskoura;
Trends are reversed for renting, Bouskoura is more expensive;
According to our surveys, these two suburbs considered as “chic” are popular with people who want to get away from the city and invest in safe and more affordable real estate than those ‘premium’ neighbourhoods in Casablanca.
Why did we choose this subject? The craze
JUMIA House wishes to put its expertise for the benefit of the Casablancan following the high-level of interest found within the platform.
Invest in Dar Bouazza or Bouskoura when trying to move away from the center of Casablanca? Rent or buy? And at what price?
Is it really cheaper than at the Center?
What is rather more expensive? How to decide?
A lot of Casablancans, whether couples, heads of families, or young single professionals who wish to settle only, are debating and / or considering their options.
In any case, it’s a topic that comes up in family meals, discussions of couples, or trips with friends.
Where do we get these figures?
The study was conducted on a representative sample of the population of Casablanca and is based on figures taken from our analytical expertise. This “match” proposes to offer to those wishing to invest in one or other of these posh suburbs an accurate and reliable comparison between the products and services available in the region. JUMIA House notes that prices are based on products marketed by estate agents, and that affordable homes are excluded from the study. For the sake of credibility, these prices were discussed with 6 agencies specializing in this segment.
JUMIA House, a subsidiary of the JUMIA Group, and whose vocation is to propose some relationship between supply and demand in real estate products, led the first comparative study in Morocco between Dar Bouazza and Bouskoura following the high-level of interest for either of these 2 districts of our platform. This study is intended for all those considering their settling in one or the other of these posh suburbs, be it under a lease or a purchase.
With this, JUMIA House wishes today to communicate to its customers some of its understanding of these markets.
JUMIA House notes that prices are based on products as currently marketed by estate agents and search of real estate in these districts continue to grow whereas some other neighbourhoods of Casablanca do stagnate (Maarif, Gauthier) or even decline (Racine, Bourgogne). As a result, JUMIA House wishes to propose to people currently in active research several items so as to allowing them to compare on several criteria such as price, facilities available, or above all accessibility.
Although the price of rent of the average square metre is higher at Dar Bouazza than that at Bouskoura, the trend is reversed if compared to the purchase price of the same square meter. According to several surveys made by JUMIA House, these two suburbs considered “chic” are mainly popular with people wishing to get away from the town centre through investment in estates in its nearest suburban developments. This was substantiated by surveys, conducted on a sample of 804 people resident in Casablanca, that showed that the urban ultras would be ready to move away from the present downtown in order to avoid the transport time inherent to their way of life (62% of respondents said they wish to leave the city center of Casablanca).
To invest in Dar Bouazza or Bouskoura would also enable them to avoid the already dense towncentre, since these two areas not only semi-detached or detached villas with land plots are offered but also studios, apartments or even duplexes in most importantly less dense environments. The two districts also offer at their respective centres recreational facilities but still near residences, as well as facilities in continuous improvement. Half of our sample appreciate Dar Bouazza as a more appropriate choice for investors than Bouskoura, although two-thirds (68%) say they currently lack information to wisely make their decisions.
Through this study, JUMIA House aims therefore to answer certain questions.
Purchase : Dar Bouazza more expensive than Bouskoura a comparison of the price of the purchase by the square meter shows that apartments are more expensive in Dar Bouazza, whereas prices are established in MAD9,379 per square meter, that in Bouskoura, which is around MAD5,341/m². Prices for the villas lie as well around MAD14,252/m² at Dar Bouazza against MAD13,067/m² at Bouksoura. The price of real estate in these posh suburbs is considerably less than premium downtown neighbourhoods that may exceed for apartments MAD19,000 in Gauthier, or even MAD20,000 in Racine per meter square.
Renting : the trends are inversed as unlike buying, the average rent per square meter of apartments in Bouskoura is more expensive than in Dar Bouazza, which at MAD75/m², a 100 m² apartment is trading around MAD7,000 against MAD67/m² at Dar Bouazza in Premium Gauthier or Racine neighbourhoods are at around MAD100/m²).
Moreover, the average rent per square metre of the villas at Bouskoura costs MAD51/m² against MAD39/m² at Dar Bouazza. This can easily be explained by a more abundant supply in Dar Bouazza, stretching along the coast, but also by the preponderance of designer houses in Bouskoura, rarer in Dar Bouazza, where new real estate represents a very large part of the supply.
Bouskoura vs. Dar Bouazza: Green Life vs Beach Life.
Two styles of life; in recent years, Dar Bouazza and Bouskoura have emerged as of the most popular destinations in Casablanca. Located respectively at 21 and 22 kilometres from Casablanca town centre, these two districts offer a quieter and more secure environment than that of the economic capital.
Bouskoura is ideally located at the edge of a 3,000 hectares wooded area that is ideal for a Sunday walk. Dar Bouazza, on the Atlantic with its 10 km of coastal road stretch has a resort and an aquatic Center.
The analysis of Clement Tesconi, GM, found that :
“The real estate sector has been “sluggish” and after the recent flat patch, we now are seeing a mutation in demand and supply.
Demand dropped in the town centre neighbourhoods in full gentrification as Casablanca urban supply, at least in its inner parts is gradually moving now towards exclusive high-quality range, preventing access to property for a large part of the population.
Land, that is increasingly sought by professionals and the development of Casablanca as a major economic centre and among other things through Casa Finance City, tend help accelerate this transformation.
Dar Bouazza, a golden spot and already fairly well served and Bouskoura, with the near completion of the cable car of Sidi Maarouf, whose first phase should be completed before the end of year 2017, would lead to believe that these two posh suburbs have many years of prosperity real estate ahead of them!”
JUMIA House Morocco is an international real estate portal dedicated exclusively to emerging countries. The platform allows users to buy, rent and sell with ease and in safety. JUMIA House was launched in January 2014, and offers more than 50,000 ads in Morocco. JUMIA House, part of JUMIA Group, is African first group website.
NB : the average income in Casablanca stands at MAD6,000 net for workers affiliated to the CNSS, and MAD11,000 for those CIMR affiliated employees, although these average wages do not reflect the reality of the informal sector wages.
Abu Dhabi buildings construction completion totals down in 2016.
Building completions are at a 10-year low in the UAE generally, particularly more so in Abu Dhabi. It is according to Property consultants Jones Lang LaSalle (JLL)’s latest Abu Dhabi Real Estate Oveview report, due to the current conjecture of cautious developers, tightened liquidity and new building and environment regulations. This new report has also revealed that smaller scale developments are being phased away over time.
JLL report says Abu Dhabi, while remaining relatively stable in the third quarter, is showing increased signs of caution with a slow-down in government domestic spending, reduction in transaction volumes and investor sentiment, according their new market review.
JLL said that due to a reduction in government spending, it expects future residential rental demand in the capital city to be affected, and to possibly directly impacting the oil sector and indirectly affecting other sectors as well.
Khaleej Times of October 2015 reported 6 months after oil prices crushed down that “The UAE government plans to cut spending, leading to job cuts and cost controls in government entities and . . . delay the commencement of new mega projects. Further increases to cost of living (through the removal of utilities and fuel subsidies combined with further potential measures such as the introduction of taxes, etc. may further impact future end-user demand.”
More recently, JLL said in its Real Estate Market Overview found that overall, Abu Dhabi’s real estate markets have generally been stable during the first quarter of 2016 despite the continued impact of lower oil prices related revenues and a reduction in domestic government spending.
The resulting current situation is, while demand has been reducing, supply completions have also been doing the same, i.e. thus reducing as well, leading to some relatively stable market conditions.
In fact, the real estate market in the UAE of 2016 is slowing down compared to its significant growth in 2013 and the first half of 2014, as per to this latest JLL report on the UAE.
Moreover, JLL expected that completion rates of residential buildings projects in 2016 to remain lower than in recent years. The materialisation rate of projects in 2015 was below expectations, with only 1,000 units delivered, compared to 7,800 delivered units in Dubai that year.
A low level of sales in the UAE has delayed the handover deadlines for projects in late 2016 and 2017, according to the report.
In the meantime, and apart from the above, expatriate tenants in Abu Dhabi will have to pay a 3% extra on their rent, as a municipality contract fee, a new charge that will be collected with monthly electricity and water bills. UAE nationals are exempt.
Privacy & Cookies Policy
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.