In its series of reports on the “Real Estate Sector Outlook to 2022” in Saudi Arabia and the UAE, Kuwait Financial Center “Marcus” announced its expectations that the real estate sector will witness rapid growth in both countries. In the second half of 2022, supported by their solid economic fundamentals. The report includes an analysis of the performance of sub-sectors; Residential, office, retail and hospitality sectors in the first six months of the year and the impact of various new social and economic policies, reforms and initiatives in this sector.
The report, prepared by Marmore MENA Intelligence “Marmore”, the center’s research arm based on the “Complete Real Estate Index”, aims to assist investors by studying the current state of the real estate market in the GCC region. Several economic indicators. The most important of them are: oil and non-oil GDP growth, inflation, creation of new jobs, interest rates, population growth and other indicators. The conclusions and observations in the reports are supported by data from the past seven years and provide forecasts for the remainder of this year and the coming year.
Real estate sector
The report “Future Outlook of the Real Estate Sector in the UAE in the Second Half of 2022” indicates that the real estate sector in the UAE generally sees an upswing in 2022 and an increase in rental value. and real estate prices. The report also indicates that the volume of transactions in Dubai in the first quarter of 2022 reached its highest total volume compared to the same period in previous years at the level of countries in the region. Among the main factors that boosted the growth rate of the real estate sector in the UAE were the upward momentum of the national economy supported by rising oil prices, growth in the non-oil sector and the positive results of Expo 2020. Dubai.
Real estate prices
In the 12 months to March 2022, average residential real estate prices in Dubai and Abu Dhabi increased by 11.3% and 1.5% respectively, and real estate prices in the UAE will continue to increase in 2022.
Rents for Class A office properties in both cities continued to rise, rising 9% and 5% year-on-year respectively. In the retail sector, Dubai saw an average rent growth of 10.5% in the first quarter of 2022, while Abu Dhabi saw a 7.8% decline in average rents.
The performance of the sector remains positive in light of increasing demand from new occupiers domestically as well as international brands. The hospitality market saw significant growth in all key indicators including occupancy rates, average daily rate and revenue per available room in the first quarter. This rapid growth may slow down in the short term against the backdrop of global events, but is expected to continue the growth trajectory in the long term.
Incentives for investors
Marcus, based on an assessment of various macroeconomic factors, expects the real estate sector in the UAE to grow in the second half of 2022. The UAE is expected to encourage investors looking for stable income to enter real estate. The market, especially in light of the availability of high rental income, coupled with the ability of renters to afford these rentals, in addition to incentive policies related to visas and new work permits, aims to attract skilled workers to settle in the UAE and sustainable urban areas. Development projects under the Dubai Urban Master Plan 2040, while the government works to further boost investor confidence through measures aimed at improving transparency and reporting in the real estate sector and restructuring government agencies and increasing efficiency and improving the investor experience.
Transaction volume in Dubai reached its highest level in the first quarter of 2022, compared to the same period of previous years.
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