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While each country has distinct dynamics, common threads like urbanization, expanding tourism, improved affordability and increased foreign investment have lifted prospects.
The blog is an in-depth look of the real estate landscape in the Middle East for H1 2024, with key highlights and trends across the UAE, Saudi Arabia , Qatar, Kuwait, Oman, Bahrain and Egypt. Further, it navigates the outlook for the sector into H2 2024 amidst global economic headwinds.
Overview of the Middle East Real Estate Market
The Middle East real estate market has grown mainly due to increased demand and massive construction. Here are the highlights:
The real estate sector in the Middle east region is likely to grow at a CAGR of 6.1% from 2023 to 2030.
- The Middle East real estate market valued at USD 1365 billion in 2022 is expected to reach USD 2,280 billion by 2030.
- The market had weathered some headwinds from fluctuations in oil prices and regional instability.
- Government economic diversification efforts and infrastructure spending are expanding long-term growth.
The stellar performance has attracted some of the biggest names in global property development, while others are regional heavyweights. Major players such as Emaar , Aldar, Nakheel , and others keep on pushing boundaries.
Residential Real Estate Dominates
The report segments the market into different property types - residential, office, retail, hospitality and more. You observe that residential real estate continues to take the lion's share:
Table 1: Middle East real estate market size by property type
| Property Type | Market Size (2022) | Share |
|---|---|---|
| Residential | USD 587 billion | 43% |
| Office | USD 236 billion | 17% |
| Retail | USD 184 billion | 14% |
| Hospitality | USD 122 billion | 9% |
| Industrial | USD 98 billion | 7% |
| Other | USD 137 billionn | 10% |
Market Spotlight: United Arab Emirates
Dubai Real Estate Market H1 2024 Report
Overview
Dubai's property market has picked up good momentum through 2023-24. It continued into H1 2024, with the streak going across both sales and rental segments.
The total value of transactions in H1 2024 touched AED 122.9 billion, although the number surged 22.22 percent year-on-year with 43,075 deals, according to data by the Dubai Land Department. Based on searches and transactions, areas such as Dubai Hills Estate , Palm Jumeirah , Business Bay , and Dubailand are currently the most favored destinations for investors across residential segments.
Dubai is building up its resident population and as an international investment and tourism destination, thereby creating authentic internal demand drivers, which are likely to continue for some time. Macro conditions may stay volatile, but the sound fundamentals underpin a constructive base case.
Top Areas to Buy Apartments in Dubai
We've categorized the most popular areas for buying apartments in Dubai into affordable, mid-tier, and luxury:
Affordable
International City has been the top area for affordable apartment sales in H1 2024, with average prices rising by 3.68% to AED 692 per square foot. ROI remains high at 8.37%. Total sales transactions in the area also increased by 7.86%.
Other leading affordable areas like Dubai South , Dubai Production City, and JVC also saw prices and transactions rise. These peripheral areas offer budget-friendly options starting at AED 300k, but they have good connectivity and amenities. Their distance from prime districts keeps prices relatively low.
Mid-Tier
In the mid-range segment, established neighbourhoods like Jumeirah Village Circle (JVC), Jumeirah Lake Towers (JLT), and Dubai Sports City (DSC) have witnessed strong demand growth amid rising rents and sale prices. These areas offer proximity to Dubai’s prime districts along with holistic community living at reasonable rates, driving popularity.
For instance, average sales rates for apartments in JVC surged by 6.54% YoY along with a 15% rise in average transaction values to AED 1.7 million. Meanwhile, JLT saw average prices increase 5.74% along with a 39% appreciation in average transaction prices to AED 1.73 million.
Luxury
Prime areas like Dubai Marina , Downtown Dubai, and Business Bay continue to be top choices to buy luxury-branded residences and for investment purposes.
Average sales rates per square foot have increased steadily by 2% to 7% in these three established hubs, while average transaction values have also surged anywhere between 6% and 14%.
Dubai Marina saw the highest transactional surge at 14%, along with a 6% price growth. Downtown Dubai and Business Bay followed, recording 5-9% value growth alongside steady price rises per square foot.
Top Villa Sales Areas in Dubai
' The top zones for villa sales in H1 2024 include:
Affordable
Investors seeking affordable villas for sale mostly considered peripheral suburbs like DAMAC Hills , Dubailand, and The Valley. These areas offer 3-5 bedroom townhouses and villas within a budget of AED 2–4.5 million.
Average per square foot rates here rose by around 7% to 11.8%, while average transaction values surged between 17% and 42%. DAMAC Hills 2 specifically saw transactions leap 42%, showcasing heightened interest.
Mid-Tier
In the mid-tier bracket, established areas like The spring, JVC and Al Furjan have seen strong demand as they offer reasonable-sized villas below AED 10 million.
Price per square foot rose steadily around 8% to 16% across these areas, while average transaction values also recorded upticks of 5% to 22%, indicating rising interest.
Luxury
For the luxury end, areas like Arabian Ranches, Dubai Hills Estate , and DAMAC Hills have been highly popular. These areas boast premium villas in the 25,000–60,000 sq. ft. range, costing AED 10-75 million.
Resale villas saw price appreciation of 10% to 15% per square foot amid rising high-end demand, corroborated by a leap of 8% to 24% in average transaction values as per DLD in H1 2024.
Strong ROI Locations in Dubai
ROI for Apartments
Some affordable areas promising best rental yields for apartments were Dubai Investment Park at 10.8%, Discovery Gardens at 10%, and International City at 8.37%.
Among mid-tier options, Dubai Sports City led at 9.47%, alongside Dubai Silicon Oasis at 9.28% and JVC at 8.65%. For luxury, Green Community offered the highest projected ROI of 8.89%, followed by Al Sufouh at 8.78% and DAMAC Hills at 8.01%.
ROI for Villas
Top zones for ROI on affordable villas were International City at 7.53%, Wasl Gate at 6.5%, and DAMAC Hills 2 at 6.97%.
Jumeirah Village Triangle led the mid-tier segment at 7.37%, followed by Mudon at 6.53% and JVC at 6.23%. The Sustainable City topped for luxury villa ROI at 7.11%, alongside Al Barari at 6.37% and Tilal al Ghaf at 6.42%.
Key Off-Plan Launches
Investors have shown an inclination towards off-plan properties with attractive payment plans and future growth potential. Some popular projects launched in H1 2024 are:
- Affordable Apartments: Verdana Residence 2, Rukan in Dubailand, AG Square in Dubai Residence Complex
- Mid-Range Apartments: District 10 in Jumeirah Village Circle, The Central Downtown in Arjan, Sobha Verde in Jumeirah Lake Towers
Luxury Apartments: Jumeirah Living Business Bay, Mercedez Benz Places by Binghatti in Downtown Dubai, Armani Beach Residences in Palm Jumeirah
Affordable Villas: Reportage Village in Dubailand, Azizi Venice in Dubai South, Verdana 2 in Dubai Investment Park
Mid-Range Villas: Murooj Al Furjan in Al Furjan, June in Arabian Ranches 3, Nad Al Sheba Gardens in Nad Al Sheba 1
Luxury Villas: Elysian Mansions in Tilal Al Ghaf Dubai, District One in Mohammed Bin Rashid City, Cavalli Estates in DAMAC Hills
Abu Dhabi Real Estate Market H1 2024 Report
Introduction
The first half of 2024 has been highly promising for Abu Dhabi Real Estate , with positive momentum across both affordable and high-end segments. Improved market dynamics, rising population, expanding tourism prospects, and upcoming mega-projects have energised the sector, with all signs pointing towards sustained long-term growth.
Key Highlights of H1 2024
Some vital statistics as per the Abu Dhabi sales market report H1 2024:
- Total residential transactions were valued at AED 52 billion, rising 17% YoY.
- Average apartment prices increased by 8% for affordable and 6% for luxury units.
- Affordable apartment prices per square foot averaged at AED 5,850.
- Average villa sales prices climbed 10% for luxury houses and 6% for affordable options.
- ROI remained stable, and gross yields were healthy across most investment zones.
Top Areas for Affordable Apartments
The hottest markets for affordable 1-2 bedroom apartments priced below AED 1 million included:
| Area | Avg Sale Price/SSqFt | % Change from H2 2023 |
|---|---|---|
| Al Reef | AED 687 | +2.16% |
| Al Ghadeer | AED 814 | +9.50% |
| Masdar City | AED 1,181 | +0.45% |
| Baniyas | AED 732 | -2.47% |
Al Reef and Al Ghadeer showed the strongest buyer activity and price growth given high demand for budget-friendly apartments close to central Abu Dhabi. Meanwhile, Baniyas saw a minor dip in rates.
Popular Locations for Luxury Apartments
High-net-worth individuals and investors seeking opulent 1-2 bedroom apartments showed preference for:
| Area | Avg Sale Price/SqFt | % Change from H2 2023 |
|---|---|---|
| Al-Reem Island | AED 1,091 | +2.75% |
| Al-Raha Beach | AED 1,281 | +0.50% |
| Yas Island | AED 1,401 | +2.77% |
| Saadiyat Island | AED 2,164 | +6.0% |
These premium developments along Abu Dhabi's waterfront saw steady price increases of 2-7% amidst rising ultraluxury demand.
Best Regions To Buy Affordable Villas
Home buyers and investors seeking budget villas priced below AED 4 million are mostly considered:
| Area | Avg Sale Price/SqFt | % Change from H2 2023 |
|---|---|---|
| Al Reef | AED 754 | +3.11% |
| Khalifa City A | AED 840 | -1.73% |
| Al Ghadeer | AED 819 | +6.10% |
| Hydra Village | AED 508 | +1.11% |
Located in different parts of the city, these neighbourhoods offer spacious townhouses, twin villas, and standalones, making them top affordable options.
Popular Premium Villa Zones
The luxury villa segment above AED 10 million in Abu Dhabi comprising palatial houses also sustained momentum, with buyers focused on:
| Area | Avg Sale Price/SqFt | % Change from H2 2023 |
|---|---|---|
| Yas Island | AED 1,270 | +10.3% |
| Al Raha Gardens | AED 857 | -0.74% |
| Saadiyat Island | AED 1,778 | +4.33% |
Yas Island outperformed with double-digit price growth and liquidity given its investment viability. Meanwhile, Al Raha Gardens and Saadiyat Island also witnessed reasonable appreciation in sale rates.
Healthy ROIs Across Abu Dhabi
Many areas offered gross yields between 5% and 9%, making them appealing buy-to-let markets:
Apartments
| Area | ROI |
|---|---|
| Al Ghadeer | 8.52% |
| Al Reef | 8.34% |
| Masdar City | 6.61% |
Villas
| Area | ROI |
|---|---|
| Hydra Village | 8.08% |
| Al Ghadeer | 7.11% |
| Al Reef | 6.18% |
Overall, both end-users and investors can achieve satisfactory risk-adjusted returns across budgets to premium Abu Dhabi zones.
Notable Off-Plan Launches
Some popular off-plan projects unveiled in H1 2024 included:
Affordable Apartments
- Royal Park in Masdar City
- Al Reeman 1 in Al Shamkha
- Bloom Living in Zayed City
Luxury Apartments
- City of Lights in Al Reem Island
- Yas Bay on Yas Island
- Saadiyat Cultural District on Saadiyat Island
Mid-Range Villas
- Fay Al Reeman 2 in Al Shamkha
- Bloom Living in Zayed City
Luxury Villas
- Yas Acres on Yas Island
- Murjan Al Saadiyat on Saadiyat Island
New off-plan options targeted all budgets and leveraged Abu Dhabi’s expanding master-planned communities to draw investor appetite.
Ras Al Khaimah (RAK) Real Estate Market H1 2024 Report
Overview
The northernmost emirate of the UAE and closest to Dubai continues to strengthen its real estate prospects. H1 2024 built further positive momentum with prices, transactions, and new developments rising.
H1 2024 Market Update
As per the latest data, Ras Al Khaimah Real Estate has grown substantially.
- Apartment prices surged 18.5%, with rents rising 7-11% during H1 2024, signalling a demand-supply imbalance.
- Branded apartments are priced from AED 800,000 for studios and AED 1.2 million for 1-bed units.
- Prime 3-bed homes and luxury waterfront villas are now demanding prices above AED 7 million.
- Land plots are also selling at prime rates, averaging AED 500/sq ft in key areas.
- Hotel occupancy scaled a high of 84% in H1 2024.
Key Ras Al Khaimah Growth Triggers
Multiple factors will stimulate the property market in H2 2024 and beyond:
| Factor | Description |
|---|---|
| Freehold Incentives | Allow international buyers freehold title and flexibility to rent out units bought in designated zones without restrictions |
| Tourism Prospects | Plans to boost leisure tourism by showcasing adventure sports, beach resorts, and wildlife will lift the hospitality sector real estate. |
| Connectivity Upgrades | Proposed highways like the RAK Ring Road and national Etihad Rail network to spur developments in new corridors |
| Business Environment | RAK government reforms regarding ownership, flexible visa schemes, and streamlined registration procedures. |
| Affordability | A reasonable property price-to-income ratio allows for greater access to housing across income segments. |
H2 2024 Predictions
In their latest Ras Al Khaimah real estate market forecast, experts predict accelerating growth trends:
- Residential: Sales prices are projected to rise 18-22% by 2024 end, with average gross rental yields of 7-8%. Additional 10,000 units may enter the market through 2025.
- Hospitality: RevPAR is likely to jump 12-15% given the upcoming supply totaling 2,800 keys over the next 18 months tailored towards luxury travelers. Beach resorts and hotels at prime sites to see strong investor demand.
- Commercial: Office rents forecast to record a 5-7% uptick in 2024, while strata-title office sales prices are predicted to achieve 8-12% gains as more freehold plots become available. Yield on finished office assets seen averaging 7-8%.
- Retail: Organized retail penetration remains low at 30%, leaving a large growth runway. Numerous mixed-use precincts are under construction, with retail components likely to achieve sales rates of AED 2,500-3,000 psf depending on site plan.
- Industrial: Rapid rise of manufacturing and storage activity to require ready-built warehouses and industrial plots. Rents may appreciate 6-8% across key clusters.
Verdict: RAK real estate offers sustainability and relatively low entry price points, key to substantial medium-term capital growth.
Sharjah Real Estate Market H1 2024 Report
Starting the year on a robust note, Sharjah property landscape displayed remarkable resilience, sustaining positive momentum over the January-June 2024 period.
January 2024 Market Highlights
As per a report by Economy Middle East:
- Total real estate trading value reached AED 3.9 billion, an unprecedented 95% yearly rise versus January 2023’s AED 2 billion figure.
- Transaction volume more than doubled from 2,999 deals to 5,412 over the same period, confirming heightened market activity.
- Sharp monthly spikes underscore investor appetite for the emirate’s affordable real estate offerings. Assets traded span villas, apartments, and land plots across residential, commercial, and industrial sectors.
February-April 2024 Recap
Through the February-April period, the positive streak continued unabated:
- February: AED 3.1 billion worth of transactions across 4,458 deals
- March: AED 3.1 billion in traded value across 2,606 transactions
- April: recorded AED 1.7 billion in deals across 1,632 transactions
While April saw some slowdown post a blockbuster Q1 performance, activity remained reasonably robust, underscoring sustainable broad-based demand across asset classes in Sharjah.
H1 2024 Transactions Overview
| Total Value | Deals Volume |
|---|---|
| AED 11.8 billion | 14,108 |
Key Trends Attracting Investors
Multiple factors are driving investor interest:
| Trend | Description |
|---|---|
| 1) Business Environment | Flexible ownership laws, investor facilitation agencies and subsidy measures |
| 2) Infrastructure | Ongoing expansions to highways, roads, and rail networks unlocking new areas |
| 3) Industrial Growth | Rapid development of manufacturing, logistics, and warehouse clusters |
| 4) Tourism Prospects | Government initiatives to promote leisure, hospitality, and healthcare offerings |
| 5) Commercially Viable | Healthy rental yields between 7%-9% across residential and office assets. |
| 6) Relative stability | Mature market with lower volatility versus neighboring Dubai. |
H2 2024 Forecast
Backed by YTD performance and latest developments, industry consultants relay a positive outlook:
- Economists foresee strong 5-7% GDP expansion for the full year 2024 to catalyze real estate
- Further government stimulus policies will sustain existing momentum.
- Planned mega-projects to improve infrastructure and uplift sectors like tourism
- With Dubai prices rising, investors are likely to increasingly turn towards Sharjah.
- Population and job growth to support organic demand for various property types
- Overall capital values and rental rates expected to record healthy upticks
Sharjah seems geared for promising H2 2024 growth building on solid foundations. Prospects appear bright for end users and investors alike.
GCC Real Estate Market Report H1 2024 Roundup
Saudi Arabia Market Update
Residential
The residential market across key Saudi cities has seen progressive growth amid government-led reform initiatives.
- Total residential transactions rose 9.3% in H1 2024 to 278,556 deals.
- Launches remained muted, with only 10,634 new units unveiled, though several megaprojects are in the pipeline
- Riyadh accounted for 37% of KSA transactions, followed by Makkah (18%), Eastern Province (17%), and Madinah (10%).
- Apartment and villa sales prices rose steadily around 3-7% in Riyadh, Jeddah, and Dammam.
- Affordability remains a central theme with projects focused on middle-income groups.
Office
- Average office rents climbed 2.8% in Riyadh and 3.2% in Jeddah during H1 2024.
- Prime office rents vary between SAR 1,600 and SAR 1,900 per sqm in major metros.
- More SMEs opting to purchase offices given financing incentives
Retail
- Shopping malls seeing a gradual recovery trend as tourists return and activity recovers
- Entertainment and F&B themes gaining prevalence across new mixed-use communities
- With rising youth demographics, organized retail penetration is still low at 40%, offering upside
Hospitality
- Hotel occupancy rates across key cities are recovering swiftly from pandemic lows, reaching 58% in Riyadh and 68% in Jeddah.
- Religious tourism rebound to drive hospitality metrics further.
Industrial
- Rapid growth of manufacturing under Vision 2030 requires integrated industrial cities.
- Government offering subsidized, ready-built warehouses and plug-n-play facilities
Market Spotlight: Saudi Arabia
Saudi Arabia real estate sector maintained robust growth amid Vision 2030 diversification policies and Riyadh's designation as one of the world's emerging global cities.
Property transactions picked up momentum, rising 21% year-on-year to 333,000 deals in H1 2024 per official data. Total value reached $42.3 billion, up 30% compared to H1 2023.
The residential sector saw prices appreciate significantly:
Riyadh: Apartment prices rose 7% to SAR 2,578 per sqm, villas by 9% to SAR 1,624 per sqm
Jeddah: Apartment prices increased 11% to SAR 1,899 per sqm, villas by 7% to SAR 1,598 per sqm
Eastern Province: Apartments up 6% to SAR 1,679 per sqm, villas by 8% to SAR 1,520
The Kingdom's giga projects generated substantial interest from investors:
The Red Sea Project: Sold out Phase 1 of luxury apartments during H1 2024, with prices ranging from $1.1 million to $4.4 million
NEOM: Apartment sales launched in The Line, the car-free linear city, starting from $133,000
AlUla: Sold out phase 1 of luxury Sharaan resort villas priced over $1 million
Outlook:
The positive momentum in Saudi realty will likely continue as more mega projects are delivered and the mortgage law expands home financing access. A potential risk is the impact of rising global rates if the Saudi Central Bank hikes interest rates.
Market Spotlight: Qatar
Qatar's real estate market showed signs of turning a corner after lackluster performance in recent years, supported by its hosting of the FIFA World Cup 2022.
Total sales transactions jumped 60% in H1 2024 versus the same period last year. Ready properties made up 58% of sales, while off-plan constituted 42%.
Average sales rates for apartments rose around 3.2% to QAR 9,800 per sqm. Average villa sales rates climbed 2.8% to QAR 8,400 per sqm. High-end properties appreciated sharply:
The Pearl Qatar: Apartment prices rose 6% to QAR 16,000 per sqm
Lusail Marina District: Apartment values increased 8% to QAR 9,500 per sqm
Al Waab: Villa prices climbed 7% to QAR 8,900 per sqm
Outlook:
The Qatari property market is poised for a stronger performance in 2024 and beyond, aided by economic expansion and higher foreign investment ahead of the World Cup. The main risks stem from global inflationary pressures that could impact growth.
Market Spotlight: Kuwait
Kuwait's real estate sector showed signs of turning around after a lackluster couple of years, with property sales transaction values rising during H1 2024.
Total property sales values grew 7% in H1 2024 versus H2 2023 to $5.5 billion, as per official data. While overall transaction volumes declined slightly, the uptick in value points to recovery.
Villa/Apartment Sales:
Salmiya: Apartment prices rose 3% to KWD 1,038 per sqm
Mahboula: Apartment values climbed 2% to KWD 956 per sqm
Jabriya: Villa prices increased 4% to KWD 1,246 per sqm
Khaitan: Villa values appreciated 3% to KWD 1,157 per sqm
The commercial sector outlook improved, with retail and office space seeing increased occupier interest. However, challenges like oversupply conditions remain.
Outlook:
The Kuwaiti real estate market is expected to continue recovering slowly in 2024 due to economic growth, higher private consumption, and public-private partnerships for infrastructure development. New property launches planned for H2 2024 also bode well for the market.
Market Spotlight: Oman
Oman's realty landscape showed signs of bottoming out from its multi-year slump, demonstrating moderate growth in H1 2024.
Overall property transactions rose around 4% in total volume and 10% in aggregate value in H1 2024 compared to H1 2023 per market sources.
Villa Sales:
Al Seeb: Prices appreciated 12% to OMR 117 per sqm
Al Khoudh: Values increased 8% to OMR 158 per sqm
Apartment Sales:
Al Khuwair: Prices rose 9% to OMR 475 per sqm
Bousher: Values climbed 7% to OMR 460 per sqm
Mussanah: Rates grew 5% to OMR 312 per sqm
The leasing market witnessed gradual recovery in occupancy levels across residential and commercial assets.
Outlook:
The Omani real estate market outlook remains stable for 2024, supported by the country's economic expansion owing to higher oil prices. New tourism projects like the Ras Al Hadd development are also expected to catalyze realty activity.
Market Spotlight: Bahrain
Bahrain's property sector showed renewed vigor in H1 2024, leaving behind the weakness seen over the past few years stemming from the pandemic and low oil prices.
Market activity accelerated, with total property sales transactions rising around 11% in H1 2024 compared to H1 2023 per official data.
Apartment/Villa Sales:
Juffair: Apartment prices increased 4% to BHD 115 per sqm
Amwaj Islands: Villa values rose 3% to BHD 160 per sqm
Reef Island: Villa prices climbed 2% to BHD 190 per sqm
Riffa Views: Villa values appreciated 5% to BHD 125 per sqm
The leasing market also demonstrated improvement, with residential rental rates across Amwaj, Juffair, and Budaiya increasing by 3-5%.
Outlook:
The positive real estate market momentum in Bahrain is expected to be sustained in 2024, aided by the country's strong economic growth forecast, political stability, and new project announcements. The outlook remains upbeat despite global headwinds.
Market Spotlight: Egypt
Egypt's real estate sector continued its robust post-pandemic rebound, with market activity and prices strengthening in H1 2024.
Residential sales transactions jumped 34% in volume and 28% in value during H1 2024 versus the comparable period last year per official data.
Apartment/Villa Sales:
New Cairo: Apartment prices rose 9% to EGP 14,200 per sqm, villa values appreciated 11% to EGP 18,300
6th of October City: Apartments up 7% to EGP 11,500 per sqm, villas climbed 12% to EGP 9,800
Sheikh Zayed City: Apartment values increased 8% to EGP 16,400 per sqm, villa prices up 5% to EGP 10,500
The New Administrative Capital continued to draw buyer interest, with apartments costing between EGP 16,000 to EGP 18,500 per sqm.
Outlook:
Egypt's property market outlook remains positive in 2024, aided by urbanization trends and improving employment dynamics. However, higher borrowing costs could impact mortgage activity. Government mega projects are expected to catalyze growth around emerging new cities.
Regional Growth Drivers in H1 2024 in Middle East
Several common factors drove the uptrend across Middle East real estate markets in H1 2024:
- Economic Rebound
The Middle East region witnessed improved economic conditions in 2024, recovering from the COVID-19 pandemic. Higher oil and gas prices revived government revenues, allowing increased spending and project activity. This liquidity uplifted consumer and investor sentiment.
According to the IMF, the GCC economies are projected to grow by 5.7% in 2024 and 2.8% in 2025, supported by the positive oil market dynamics. Non-oil activity is also expected to accelerate.
For instance, the UAE's GDP is forecast to expand by 4.2% in 2024 after growth of 3.8% in 2023. Saudi Arabia’s economy is projected to grow by 7.6% in 2024 following a 8.5% expansion in 2023. Increased economic vigor translated into greater demand for real estate.
- Return of Expats
The gradual return of expat residents, who make up large portions of the population across GCC countries, revived real estate markets.
As business activity resumed and travel opened up, many expats who had left during the pandemic started returning. Their appetite for property purchases and leasing provided a shot in the arm for struggling markets.
Dubai, for instance, saw its population increase by 1.25% in H1 2024 as over 31,000 residents returned. The expat influx is likely to continue, driving housing demand.
- Government Initiatives
Favorable government initiatives and policies to boost foreign investment flowed into Middle East real estate markets.
For instance, the UAE implemented a series of new visas - the Golden Visa , Remote Work Visa, and Investor Visa. Saudi Arabia launched its Premium Residency Scheme.
These stimulated interest from foreigners to relocate, live, work and invest in the region, bringing in fresh demand. Several governments also eased restrictions on foreign property ownership to attract investment.
Mega Projects
Large-scale developments like NEOM City in Saudi Arabia and MBR City in UAE generated substantial investor interest, uplifting local property markets.
These futuristic mega projects acted as catalysts to drive transactions and boost prices in surrounding areas. Their vision and scale sparked investor enthusiasm. For instance, developers sold out phase 1 of luxury apartments in Saudi's Red Sea Project during H1 2024.
Lifestyle Upgrade
The pandemic triggered a shift in housing preferences, with buyers prioritizing larger spaces, amenities, neighborhood facilities, outdoors, and sustainability.
This motivated transactions as households looked to upgrade to larger homes, villas, townhouses, and communities with facilities like pools, gyms, walking trails etc.
Work-life balance and well-being became key considerations alongside factors like remote work potential. Homes evolved into lifestyle centers.
Retail Investor Activity
The Middle East saw heightened activity from small retail investors in H1 2024, taking advantage of attractive property prices and lower entry thresholds.
Retail buyers were drawn to affordable off-plan projects, smaller units, and strong rental yields. Government incentives like residency permits for property buyers further drew individual investors.
For instance, Dubai properties worth under AED 2 million made up 73% of transactions in H1 2024. Smaller investors sought accessible options.
Mortgage Growth
The Middle East mortgage sector witnessed strong expansion in H1 2024, although rising interest rates slowed momentum later during the period.
Low rates and government incentives had boosted mortgage activity and real estate transactions after the pandemic. Despite emerging rate headwinds, lender appetite remains robust.
For instance, mortgage activity accounted for 41% of Dubai's H1 2024 transactions, driven by banks eager to grow their loan books.
Summary
Despite cross-currents like inflation and rising interest rates, the Middle East real estate markets have shown tremendous resilience overall. GCC governments have undertaken business-friendly reforms while also launching various real estate-focused stimulus measures. This has restored confidence across end-users and investors.
Looking ahead, factors like urbanization, expanding tourism, population growth, and greater economic diversification across oil-producing nations seem set to catalyze sustainable growth. Hence, the long-term structural outlook looks positive.
Each country offers unique strengths like the premium lifestyle appeal of Dubai, the affordability of Sharjah, the tourism infrastructure of Qatar, the resilience of Kuwaiti real estate, or the dynamism of Saudi Arabia’s emerging market. With proper due diligence and calculated risks, opportunities abound for regional investors.
