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According to a recent report by the US real estate services and investment company CBRE, the real estate market in the Middle East will remain strong in 2023, driven by high oil prices and strong economic growth. According to the report, the UAE and Saudi Arabia will lead the sector’s march.
According to a recent report by the US real estate services and investment company CBRE, the real estate market in the Middle East will remain strong in 2023, driven by high oil prices and strong economic growth. According to the report, the UAE and Saudi Arabia will lead the sector’s march.
The total value of real estate projects currently planned or under implementation in the GCC countries is $1.36 trillion. And Saudi Arabia acquired 64.5% of this total, which is equivalent to about $877 billion in projects. followed by the Emirates; The value of projects amounted to 293 billion dollars (1.07 trillion dirhams), or 21.6% of the total.
Strong levels of economic growth continue to attract the region, especially to the UAE and Saudi Arabia. Given the supply constraints in these two major office markets, Dubai and Riyadh, the report expects rental rates to continue to grow.
Residential real estate
The housing markets in the region may witness a somewhat rewarding performance in 2023; Oversupply in some markets will lead to underperformance while undersupply in major business hubs, such as Dubai and Riyadh, is likely to mean these markets are outperforming.
The real estate market in the UAE has been operating at varying levels of performance over the past year. As rental prices increased in Abu Dhabi by 5.6% and Dubai by 51.5%, the company stated in the report that it expects the two emirates to witness convergence in performance. Abu Dhabi is likely to witness an acceleration of rental growth.
hotels
The report stated that this year is the first year that will be entirely free of restrictions related to the epidemic, and as a result, it is expected that most of the time, the main performance indicators will continue to improve and by the end of the year they will exceed 2019 levels almost uniformly.
local production
According to the company, both the hydrocarbon and non-hydrocarbon sectors have witnessed strong rates of recovery over the past year; Economic growth in the GCC region significantly exceeded the global average during 2022.
During this period, it recorded an average growth rate of 6.3%, and as it moves to 2023, it is expected that the GDP growth will reach 2.7%.
With regard to the total value of real estate projects planned or currently under construction in the region, amounting to about $1.36 trillion, Bahrain’s share constitutes 1.7%, Kuwait 4.4%, Oman 4.6%, and Qatar 3.3%.
The report says that while this level of investment in real estate is an essential part of diversification strategies in a number of countries, continued development and ease of regulation will be important in supporting these initiatives.
Taimur Khan, head of research for the Middle East and North Africa region at CBRE, said: In general, it is expected that the economies of the Gulf Cooperation Council countries and real estate markets will continue to achieve relatively strong levels of performance during the next year, despite the weak global economic background.
