GCC real estate market will remain under pressure; developers to continue offering incentives

GCC real estate market will remain under pressure; developers to continue offering incentives

The residential market in the GCC is expected to remain under pressure until segment fundamentals such as number of households, employment rates improve, KAMCO Invest said in a report.The Kuwait based investment and financial services company said developers will continue to offer a range of incentives such as fee waivers, discounts and rent-to-own agreements, combined with home finance options to attract new investors looking to take advantage of the lower prices.  “We do expect the supply-side to tighten cyclically in 2021, in terms of lower number of upcoming project announcements from developers, which should aid in arresting the ongoing steep declines of prices and rents,” the asset management company said in its December GCC real estate update.According to the report, the residential sector could see a recovery in rents and prices aided by government support.Real estate transactions in the GCC area declined as of the end of October 2020, as total value transacted receded by 4 percent year-on-year to $72.1 billion, from $75.5 billion in the same period in 2019.While, transaction volumes fell by 11 percent year-on-year over the same period, residential affordability has intensified with COVID-19.The pandemic has caused additional headwinds for end-user demand in GCC's residential real estate segment,