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The total value of real estate projects planned or underway in the GCC is currently US$1.36 trillion, with Saudi Arabia accounting for the largest share of 64.5%, equivalent to approximately US$877 billion in projects, followed by the UAE at 21.6% of the total regional projects . Leading real estate specialist CB Richard Ellis.
In its recent “Middle East Real Estate Market Outlook 2023,” CBRE said it expects a positive outlook for the real estate sector in the Middle East this year, as higher oil prices and firm economic growth are expected to support strong tenant and investment levels of activity.
The economies of the GCC countries are expected to continue to grow strongly in 2023. Hydrocarbon and non-hydrocarbon sectors are expected to continue to contribute significantly to the overall growth rate. The average GDP growth rate of the GCC countries will reach 2.7 percent by 2023, it added.
CBRE noted that price performance in the GCC residential sector was fragmented last year.
“First, on a positive note, we are seeing price falls, but relatively modestly. However, price increases in Dubai and Riyadh are well above the regional average. The UAE is the only market to see price increases in 2022, with all Deal volumes are growing across cities and sectors,” it said in the report.
“In Dubai, while we do expect transaction volumes to decline year-on-year, we expect prices to continue to rise, albeit at a slower pace, in the apartment and villa markets. In Abu Dhabi, we forecast an increase in transaction volumes and price growth rates over the coming year ,” it added.
In Bahrain, CBRE said villa prices are expected to record low-single-digit price growth. In the apartment segment of the market, prices are expected to drop significantly given the newly launched projects and existing supply levels.
In Saudi Arabia, price performance in the apartment and villa markets is likely to become more polarized in the year ahead.
House prices are expected to continue rising, albeit at a slower rate, while apartment prices are likely to continue to soften. However, we do not expect this trend to be seen in Riyadh, where price growth rates are expected to slow, said the real estate expert.
In line with its sales market trends, in Bahrain we expect villa rents to rise slightly in 2023, while average rents are expected to fall further over the same period, it added.
Residential rents in Dubai will hit an all-time high in 2022, according to CBRE. Average apartment rents rose 27.1% and average house rents rose 24.9% during this period.
Demand also surged, with the number of rental contracts registered up 10.8% year-on-year, but new registrations fell 7.0%. Rents in Dubai will continue to grow uniformly through 2023, but we won’t see this happening at the same pace, industry experts say.
“For Abu Dhabi, in the villa market, we expect growth rates to likely remain positive, but still in the low single digits. In the apartment market, we expect positive rental growth to return during the year, however. The growth rate will not be very high,” it added.-TradeArabia News Service
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