Gulf market forecast to keep booming despite looming challenge of oversupply

The Dubai construction and property market should remain strong this year in spite of likely oversupply, according to credit ratings agency Fitch Ratings.

In a report published today, the organisation said the outlook for construction in the Gulf in general is more positive than in western Europe.

It said strong GDP growth, rising income, soaring population and increasing mortgage availability are driving growth in Dubai, Abu Dhabi and Doha.

But the report said there are “challenges ahead”, notably the prospect of oversupply.

Bashar Al Natoor, a director of Fitch, said: “Many challenges have begun to surface, mainly the prospect of oversupply - if current delivery plans are met - and the risk of being unable to stimulate demand in view of massive development projects in the pipeline.

“Nevertheless, there is a high probability of late delivery, and even project cancellation, due to logistical constraints, which could ultimately result in a better match between supply and demand.”