Dubai to Retain GCC Realty Market Lead in the Coming Year

Dubai to Retain GCC Realty Market Lead in the Coming Year

Almost half of the transactions of the GCC in 2023 worth $171.6 billion were dominated by the real estate sector in Dubai.

According to realty analysts, it will continue to dominate the buoyant property market in the region in 2024 as well.

Dubai and Riyadh

The real estate supply in the region in most segments may get sensitive quickly to market-wide headwinds in the coming year.

However, analysts at Kamco Invest said that frontline developers in Dubai and Riyadh with strong liquidity would be able to calibrate quickly for bringing the right products into the market.

They said that residential developers in both Riyadh and Dubai with an attractive product mix, dominant brand equity and affordable payment plans would be able to sell off their new launches.

The office markets in these two regions are also expected to stay resilient while competing for the market share of their regional headquarters (RHQ).

As far as retail is concerned, Kamco said that strength would be seen in community linked malls and super regional malls in typical late-cycle trends.

They are expected to continue recording higher occupancy rates and tenant portfolio risks are also expected to be mitigated adequately.

The markets

In terms of the industrial warehouse market, there will be demand for specialized warehouse spaces and they will also be in short supply.

This would see rent of these spaces rise in 2024 and the rental gap would be further widened with lower quality spaces.

Another top real estate expert CBRE said that the total value of real estate projects in GCC, both underway and planned, is currently around $1.36 trillion.

The lion’s share belongs to Saudi Arabia with projects worth $877 billion that account for 64.5%. UAE has about 21.6% of the total regional projects in the region.

GCC’s real estate sale transactions in the first 10 months of 2023 stood at $171.6 billion, which was a 2.11% year-on-year increase from the same period last year at $141.7 billion.

Realty transactions

The contribution of the realty transactions in Dubai to the total transacted value in the region was about 52.1%.

The Dubai market was able to offset the declines that had been recorded in other prominent markets, such as Kuwait, Qatar and Saudi.

There was an almost 57% increase in the value of real estate transactions in Dubai in the 10-month period, which was primarily due to the leading developers’ strong pricing.

In addition, there was also off-plan demand of single-family, multi-family homes as well as luxury properties valued above AED 5 billion.

In fact, there was also a 56% increase in the value of transactions conducted in Abu Dhabi in the first nine months.

Both markets in the UAE increased the transaction value in the GCC in the first 10 months of 2023 higher than the full year estimate of $165.8 billion recorded in 2022.

However, GCC saw the number of transactions remain mostly stable in the first ten months, as a total of 495,872 deals were made, even though both Abu Dhabi and Dubai saw transactions jump.

Comments are closed.