A well-regulated, technology-enabled real estate sector together with a robust mortgage finance market, play a fundamental role in developing economies.
A strong real estate sector seeks to facilitate transition and consolidation of green economies with employment generation and growth.
Moreover, sound real estate markets not only stimulate economic recovery in the short run, but also promote long-term sustainability.
Although governments in the Middle East have taken economic measures and launched incentive packages to support development of various sectors, including the real estate sector, certain fundamentals, such as legislative and regulatory frameworks, can still be improved in order to achieve long-term sustainability and facilitate economic development.
Taking a closer look, within global indices such as the International Protection Rights Index, the Real Estate Transparency Index, and the UN E-Government Development index, the Middle Eastern Real Estate markets are classified as being at a developing stage.
In response to the classification, PwC Middle East has conducted an analysis of top ranking markets within such indices to draw best practices for the region.
With this point of view, the firm has highlighted six guiding principles that could help achieve social and economic objectives while providing long-term solutions for the real estate market across the Middle East.
- Integrated legal framework
- Land/property register and cadastre system
- Effective governance
- Proficiency of service
- Sustainable financing
- Data management and transparency
These guiding principles were developed to help address specific issues present in markets in the region, namely, market distortions, imperfect competition, asymmetric information, and other externalities.
While the real estate markets in the region as a whole can benefit from the six guiding principles, each country has a varying degree of maturity within each category.
Commenting on the report, the real estate leader at PwC Middle East, Dr Martin Berlin, said: “We see huge potential for growth in Middle Eastern Real Estate markets. Across the region, many regulators are already making strides in closing the regulatory gaps between the Middle East and high-ranking markets globally.
“We developed six principles to act as a guide based on an analysis of these high-ranking markets to support regulators in their quest to achieve long-term sustainable growth.”
Dr Martin Berlin added: “We believe the six suggested principles ,when followed, will have an impact on reducing volatility in the market and have a price correcting effect, reducing the cost of living for households and related costs for businesses and taking inflationary pressures off wages.”
To learn more about the analysis, the expected outcomes of the six guiding principles, or to read in depth case-studies of different markets, read the full report here.
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