The real estate market in the GCC region is poised for continued post-pandemic recovery and sustained growth in 2022, according to a report by Kuwait Financial Centre (Markaz).
The series of reports also analyze the performance of the Mena real estate sector in H2-2021 and outline the major reforms, events, and developments influencing new and emerging trends, stated Markaz in its 'Real Estate 2022 Outlook' reports for Saudi Arabia, Kuwait, and the UAE.
The reports were prepared based on the ‘Markaz Real Estate Macro Index’ to help investors identify the current state of the GCC real estate market through various economic indicators such as oil and non-oil GDP growth, inflation, new job creation, population growth, among others.
According to the report, GCC real estate sector will experience a noticeable rebound and stability in 2022 due to varying factors ranging from overall economic growth to supportive government measures.
On the Saudi market, the Markaz report said the growth of the kingdom’s real estate sector was mainly driven by sustained economic momentum, government spending on Vision 2030 infrastructure projects, and robust oil prices.
The 0.5% rise in real estate prices due to the 1.3% year-on-year increase in residential and land prices during Q3-2021 signifies the sector’s solid post-pandemic recovery, stated the report.
The various government initiatives, including Sakani (enabling Saudi citizens to own their first home) and Wafi (off-plan sales and rent program), have also played a key role in boosting the demand for affordable homes, report added.
Milad Elia, Executive Vice President of Mena Real Estate at Markaz, said the real estate sector in Saudi Arabia would show further stability with a chance of mild acceleration in 2022, as revealed by Markaz’s report.
"Based on our assessment of various macroeconomic factors, we believe that Saudi Arabia’s economic growth in 2021 will continue well into 2022 in the oil and non-oil sectors. The government initiatives to ensure homeownership for all and mandating regional headquarters for foreign companies have also given new impetus to the Kingdom’s real estate sector," he added.
On the Kuwait market, Markaz said the country’s real estate market is expected to experience stability following the performance achieved in 2021, supported by the reopening of economic activities and vital entities post, in addition to the rebound in oil prices, which supports economic growth and annual government budget.
The real estate transaction values reached pre-pandemic levels in 2021, driven by the private housing sector. The report predicts that the new mortgage law being proposed for the private housing sector would provide citizens with more mortgage options, it stated.
Commenting on the Kuwait outlook, Khaled A. Al-Mubaraki, Vice President of Mena Real Estate at Markaz, said: "Kuwait’s strong post-pandemic recovery and the resilient private housing segment will continue to drive demand in the country’s real estate sector. Markaz's real estate funds, including MREF and MGREF (Private Placement Fund), offer investors the opportunity to capitalize on the prospects by investing in our prudently-managed, low-risk products characterized by the diversification of their underlying assets."
On the UAE real estate scenario, Markaz report said it was well-positioned for accelerated growth on the back of rising oil prices, non-oil sector growth, global events like Expo 2020, and the opening up of the trade and travel sectors.
The report stated that the targeted government stimulatory policies aimed to boost the private sector, increased mortgage lending limits, and liberalization of visa and work permits have contributed to the positive outlook of the investment environment in the UAE.
The strong rebound of the country’s real estate sector in 2021 was marked by robust demand for residential properties, which resulted in the doubling of transaction values, it added.
Khaled J. Al-Dousari, Mena Real Estate Analyst at Markaz, said the UAE’s reform measures for attracting foreign investment, creating new job opportunities, and boosting ease of doing business as well as its global events and special visa programs are expected to drive further demand in the real estate sector.
"The UAE has the highest population growth in the GCC region, which, along with the country’s sustainable development plans including the Dubai Urban Master Plan 2040 and the long-term benefits of Expo 2020 will ensure the continued growth of the real estate sector in the years ahead," he added.-
TradeArabia News Service
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