Dubai Continues to Spearhead GCC Real Estate Market in 2024: Kamco Invest Report

Dubai Continues to Spearhead GCC Real Estate Market in 2024: Kamco Invest Report

Dubai is poised to maintain its dominant position in the GCC real estate market throughout 2024, building on a stellar performance that accounted for over half of the GCC’s transactions valued at $171.6 billion in 2023, according to realty analysts. The strategic insights provided by Kamco Invest underline the strength of Dubai’s real estate sector, projecting a sustained leadership role in the region.

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Analysts at Kamco Invest suggest that developers with robust liquidity, particularly in Dubai and Riyadh, have the agility to align their strategies with market demands, ensuring the timely introduction of diverse product types. However, they caution that the real estate supply in various segments could become vulnerable to market-wide challenges in 2024.

In the residential sector, developers in Dubai and Riyadh boasting dominant brand equity, an appealing product mix, and market-sensitive payment plans are expected to achieve successful sell-through of new launches in the build-to-sell (BTS) portfolio. The report also anticipates continued strength in office markets in Dubai and Riyadh, driven by competition for regional headquarters (RHQ) and limited new Grade-A office space supply.

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Kamco’s GCC Real Estate Update emphasizes that best-in-class super regional malls and community-linked malls in key markets are likely to witness strength, maintaining higher occupancy rates and effectively mitigating tenant portfolio risks in the retail sector. Meanwhile, the industrial warehouse market is projected to see sustained demand for specialized spaces, leading to increased rents and a widening rental gap with lower-quality alternatives.

CBRE, another leading real estate expert, reveals that the GCC currently has $1.36 trillion worth of real estate projects planned or underway. The UAE claims a substantial share at 21.6%, while Saudi Arabia takes the lead with 64.5%, representing roughly $877 billion.

Despite the collapse of other significant markets in the region, Dubai’s real estate transactions contributed significantly, accounting for 52.1% of the GCC’s total transacted value in the first ten months of 2023. The real estate market in Abu Dhabi also saw a substantial increase in transaction value during the same period.

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Kamco’s report notes a remarkable 57% year-over-year increase in Dubai’s real estate transaction value throughout the 10 months. This surge is attributed to aggressive pricing strategies by leading developers and heightened off-plan demand for luxury properties and single- and multi-family homes exceeding Dh5 million.

Despite developers commanding high prices, investors continued to find value in the market’s leading real estate products, with the average value per transaction for GCC real estate rising by 22.1% year over year between January and October 2023.

Off-plan transactions in Dubai exhibited robust momentum, with volumes rising by over 40% between January and November 2023 compared to estimates for the entire year 2022. Analysts also observed a healthy 9.8% increase in the average off-plan value per transaction from the end of 2022.

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Looking ahead, Statista’s data predicts that the GCC real estate market will reach a total value of $4.43 trillion in 2023, with a projected compound annual growth rate of 2.65% through 2028, reaching a $5.05 trillion market volume.

The UAE and Saudi Arabia emerge as primary drivers of this regional boom, with the real estate industry contributing 5.5% of GDP in the UAE and undergoing unprecedented expansion, playing a pivotal role in the country’s economic diversification.

According to CBRE’s “2023 Middle East Real Estate Market Outlook,” price growth in Dubai and Riyadh has outpaced the regional average. The UAE stands out as the only market in 2022 to witness increases in both prices and transaction volume across all cities and industries.

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In conclusion, Dubai’s steadfast position as a real estate powerhouse in the GCC is underscored by the robust data and projections presented by Kamco Invest and other industry experts. The city’s resilience, coupled with strategic initiatives, positions it as a key player in the region’s dynamic real estate landscape.

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