THE GCC’s property market is set to extend its growth momentum into the second half of the year, supported by lower interest rates, government investment, and resilient investor demand, a new analysis showed, reports Arab News.
In its latest report, Kuwait Financial Centre, also known as Markaz, noted strong activity in Saudi Arabia, the UAE, and Kuwait during the first half of the year, driven by rising property values and strong sales across the residential, commercial, and hospitality segments.
The analysis underscores the expansion of Saudi Arabia’s real estate sector as the kingdom seeks to position itself as a leading business and tourism hub by the end of the decade.
The kingdom’s Real Estate General Authority expects the property market to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024.
“With macroeconomic indicators showing signs of continued recovery, Markaz expects real estate markets in Kuwait, Saudi Arabia, and the UAE to maintain upward momentum through the second half of 2025,” Markaz said.
It added: “Lower interest rates, fiscal support, and sustained government investment in economic diversification are anticipated to drive growth and market confidence.”
The analysis said that while some markets face fiscal pressures, the overall outlook for the GCC real estate sector remains “positive,” offering “ongoing opportunities for investors, developers, and stakeholders.”
Saudi Arabia’s property market maintained strong performance in the first quarter, underpinned by a 4.3 per cent year-on-year rise in the real estate price index and a 37pc annual increase in sales, the report said.
Markaz also said that demand for commercial properties remains strong, supported by non-oil economic growth and sectoral diversification.
In July, a report by credit rating agency S&P Global echoed similar views, highlighting that international retail brands attracted by social and economic shifts in Saudi Arabia are poised to drive further growth in the real estate sector.
S&P Global also pointed to favourable prospects for residential real estate, with young Saudi families increasingly relocating to urban centers in search of work opportunities.
In June, global consultancy Knight Frank also highlighted the kingdom’s growing property market, noting that rents for Grade A office space in Riyadh reached SR2,700 riyals ($719.95) per square metre by the end of the first quarter, up 23pc compared with the same period last year.
According to Markaz, the UAE’s real estate market delivered strong results in the first quarter, with transaction values reaching 239 billion dirhams ($65bn).
Dubai generated 142bn dirhams in sales across 45,077 transactions, representing a 30pc year-over-year increase.
The report added that residential, office, and hospitality segments will continue to drive the UAE’s property sector, supported by strong demand, interest rate cuts, rising tourist inflows, and limited supply in prime locations.
In 2024, Dubai recorded a total transaction value of 761bn dirhams, up 20pc from 2023. The emirate also logged 226,000 transactions, a 36pc annual rise, and attracted more than 110,000 new real estate investors, up 55pc year on year.
Dubai also continued to outperform other global markets in rental yield at 7.6pc as of May, compared with 5.3pc in New York, 3.2pc in Singapore, and 3.1pc in London.
Kuwait’s real estate market also continued its recovery in the first quarter of 2025, supported by rising land prices and rental values in the investment and commercial segments, the report said.
The value of real estate sales reached 896 million Kuwaiti dinars ($2.93bn) in the first quarter, representing a 45pc year-on-year rise.
Sales in the residential and commercial sectors grew 38.5pc and 22.9pc, respectively, while the investment segment advanced 49pc during the same period.
The number of transactions rose 20.9pc year on year, with residential and commercial deals climbing 11.7pc and 163.6pc, respectively. The investment segment recorded a 29.7pc increase, supported by a stable rise in the expatriate population.