Much has been made of the West's decades-long energy suicide, especially amid its acceleration over the past few years. The introduction of policies to drive forward a green revolution and transition away from fossil fuels – while fuelled largely with good intention – has had the effect of threatening the quality of life for entire populations, and especially the poorest and most vulnerable within societies.
While governments in the United States and much of Europe have purposefully neglected their huge potential to harness domestic energy supplies and sources, especially in shutting down facilities for clean and significantly functional nuclear energy, they have simultaneously been attempting to meet their growing energy needs from the Gulf States.
That dichotomy has often led to an increasingly exploitative relationship, with Western governments pressuring their Gulf Arab counterparts to increase their crude oil production and lower prices per barrel, all the while hiding their own vast potential energy reserves.
The latest manifestation of that energy suicide policy occurred this month when the European Parliament voted in favour of making green renovations to homes mandatory in the European Union (EU), introducing ever stricter energy efficiency policies throughout the continent-wide economic bloc.
The legislation effectively means that around 35 million homes across Europe are "ripe for renovation", with residential buildings required to reach a minimum energy efficiency class of E by 2030 and D by 2033. Old homes – often being inhabited by the elderly themselves – are set to be the most targeted.
While it can, indeed, result in a long-term saving of home expenditures on energy bills and can be cost-effective in the future, the decision represents a huge overhaul of Europe's residential property and housing market, with costs estimated to amount to a bare minimum of €50-80,000 just for a simple renovation of 100 square metres, let alone homes of a larger size.
For the average citizen, even in a relatively well-off EU member state, that is no small amount – families, home owners and landlords would likely have to dig into their life savings and take out loans in order to meet the tens or hundreds of thousands needed for such renovation.
Proponents of the legislation insist that citizens will be eligible for measures requiring their governments to help them with the cost through the EU's Social Climate Fund, but critics express concerns that those grants may only cover a small part of the renovation costs and that, even if governments do fund most of it, it would result in an overall cost of hundreds of billions of Euros per nation, which would still eventually have a negative impact on the wider housing market and prices.
READ: As the West commits energy suicide in its green transition, it exploits the Gulf
What many fear and predict is that the costs could be so overwhelming that they would likely drive out many homeowners and private landlords from the residential property market, leaving their old properties in the hands of large investors and asset managing corporations, which just so happen to famously be the highest bidders.
Those companies such as Blackrock, Blackstone, Vanguard and other investment giants have been cashing in on the residential property market for at least a decade, buying up single-family homes in the United States and Europe. It is a practice that many see as a strategy to create a monopoly on those properties, with the long-term aim of using that mass ownership as a platform from which to firmly establish a renter generation.
Whether that is indeed the strategy, and whether that will be for some obscure political aims or mere financial gain, is unclear. What is clear is that that there is certainly a mass acquisition of residential properties and single-family homes throughout the Western world, and it is not by families, individual aspiring homeowners, or even private landlords or agencies.
Instead, the large investment firms and corporations are the primary beneficiaries, with the overall stock of housing assets held by large investors in 2020 estimated to amount to €150 billion, out of the literal tens of multiple trillions of dollars in assets companies such as Blackrock manage.
Furthermore, the data gathered by studies such as that of the European Parliament's Greens/EFA Group last year is largely hidden, with that specific study having had to pay a price of five figures for a private database to access the necessary data. To jump through such hoops simply to access basic data regarding the volume of purchases represents a major and concerning lack of transparency.
What that oncoming crisis may offer, however, is an opportunity for Arab Gulf States to, themselves, cash in on Europe's residential property market, which could potentially rival the aforementioned large multinational investment firms and – to put it somewhat romantically – 'save' European housing by offering a possible alternative to the limitations which forever-rental properties are otherwise set to be imposed upon this and future generations.
READ: Gulf regimes own $1.2bn in UK property through tax havens
The presence of the Gulf states in Europe's property market is certainly nothing new: those oil and energy-rich nations have, for decades, been swallowing up properties throughout the continent, often dominating real estate in certain areas.
One has only to look at the Qataris and Emiratis in the UK and London, the Saudis in France or the Kuwaitis in Spain. They are no amateurs when it comes to investing in Europe, but the vast majority of what they own, so far, has been focused on personal, hospitality or commercial purchases such as luxury hotels, large estates and specious mansions or villas and some commercial property. They have only dabbled in the urban residential sector to a certain degree up until now, let alone single-family homes.
If they do shift their investments into such residential housing, however, there remains a myriad of questions on what the outcome will be. Will EU nations move to restrict or heavily limit those purchases, as is already the case in some countries which impose restrictions on residential property purchases by foreign citizens' or entities?
Also, will purchasing homes be able to protect them from the newly-required renovation, which would, in some way, surpass EU legislation? There are many, without doubt, who would continue to accuse the Gulf States of attempting to practice corruption in the EU, and would speculate that they wield enough wealth and influence to sway the bloc's decision-making process.
That is doubtful, however, particularly amid the European Parliament's recent investigation into a corruption scandal involving multiple prominent figures within the institution, who were accused of accepting gifts and bribes from Qatar, in return for influence.
The Gulf States' potential of being the saviours of Europe's housing market also, most importantly, depends on whether they act in the same fashion as the large investment firms, or whether they establish different practices. Will they offer up the residential properties for purchase at affordable prices? Will they renovate the homes and then sell them for a fair price? Or will they simply continue the drive toward a renter generation in Europe?
Currently, the only real example from which we can derive a possible course of action is the fact that the few residential properties owned by the likes of Qatar in London are offered for rent, in what is the obvious strategy to maximise profits from real estate in the long-term. What guarantee is there that Gulf Arab owners will not exert their own selfish monopoly over Europe's housing market, as Western asset management and investment giants are already allegedly doing?
Regardless of whether any of the Gulf States decide to stick to the more cost-effective business strategies or recognise the desire by many Europeans to not lose access to their homes at the hands of multinational investment corporations which hardly seem to have the population's best interests at heart, the doors to Europe's residential property market are open to the fuel-rich Arab monarchies – either for the better or the worse.
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The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.