GCC’s Real Estate Sector To Witness Rapid Growth This Year
The GCC countries’ economies are expected to continue rapid expansion in the real estate sector this year.
It is anticipated that both the hydrocarbon and non-hydrocarbon sectors would continue to make significant contributions to headline growth rates.
In its recent report, “2023 Middle East Real Estate Market Outlook,” CBRE, a commercial real estate company, indicated that there is a good outlook for real estate since rising oil prices and persistent economic growth are anticipated to underpin levels of occupier and investor activity.
Real estate projects and associated sectors such as the hotels and industrial, logistics, and manufacturing sectors will play a central role in this diversification drive. The total value of real estate projects currently planned or under construction currently stands at an estimated $1.36 trillion.
Saudi Arabia accounts for 64 per cent of this total or some $877 billion, followed by the UAE, which at $293 billion, accounts for 21.6 per cent of the total. Bahrain, Kuwait, Oman, and Qatar share 1.7 per cent, 4.4 per cent, 4.6 per cent and 3.3 per cent of the total, respectively.
CBRE pointed out that the price performance in the GCC’s residential sector was fragmented last year. “Bahrain villa prices are anticipated to climb by a low single-digit percentage. Prices are expected to drop more drastically in the apartment section of the market given new launches and current levels of supply,” it stated in the report.
“Over the next year, price performance in Saudi Arabia’s apartment and villa markets is projected to become more divided.” “The UAE was the only market to record price growth and transaction volume growth across all cities and sectors.”
“In Dubai the prices will continue to increase, across both the apartment and villa segments of the market, albeit at a slower rate. In Abu Dhabi, there is growth in both volume of transactions and the rate of price growth over the course of the coming year,” it added.
