Thanks to economic momentum driven by emerging oil prices, forward-thinking government policies, and specific real estate reforms and initiatives.
Kuwait: Kuwaiti monetary medium “Markaz” Driven by strong macroeconomic fundamentals, the real estate sector in the GCC economies is on a forged trajectory to see an acceleration in the current part of the year, according to reports “Real Estate H2 2022 Outglance”. for the United Arab Emirates and Saudi Arabia were recently issued through Kuwait’s financial medium “Markaz”. The reports also analyse the functionality of subsectors such as residential, office, retail and hospitality in the first six months and analyse the impact on various new socio-economic policies and real estate reforms and projects on the sector.
Prepared through Marmore MENA Intelligence, a 100% subsidiary of Markaz, founded on the Markaz Real Estate Macro Index, the reports help investors identify the current state of GCC’s real estate market through economic indicators such as oil and non-oil GDP growth. , inflation, task creation, interest rates and population growth, among others. The conclusions and observations contained in the reports are based on knowledge from the last seven years, as well as estimates for the remainder of the existing year and forecasts for the following year.
The “UAE Real Estate Outlook H2 2022” shows that the country’s real estate sector has noticed a general upward trend this year, with emerging incomes and asset prices. Together with a price accumulation, the volume of transactions in the first quarter of the year in Dubai reached its overall level for the first quarter never recorded in the region. The upward momentum of the national economy driven by emerging oil prices, the expansion of the non-oil sector and the good fortune of Expo 2020 Dubai were some of the main drivers of expansion in the real estate sector.
Consistent withty costs in the UAE continue to rise in 2022, with average emerging residential asset costs in Dubai and Abu Dhabi through 11. 3% and 1. 5% respectively in the 12 months to March this year. marking an increase of 9% and 5% per year respectively. In the retail segment, Dubai experienced a steady average hiring expansion of 10. 5% in the first quarter of 2022, while Abu Dhabi experienced an average hiring decline of 7. 8% during the same consistent coniod. The sector remains positive thanks to the growing demand from new local entrants and foreign brands. Meanwhile, the hospitality market experienced significant expansion across all key indicators, adding occupancy rates, average daily rate (ADR) and earnings consistent with available space (RevPAR) in the first quarter. This immediate expansion following global events could stabilize in the short term, but continue its long-term expansion trajectory.
Based on its assessment of various macroeconomic factors, the report forecasts that the real estate sector in the UAE is expected to increase in the current part of 2022. Relatively high rental yields along with affordable prices, favorable visa policies, and new paints allow that to happen. The aim is to allow a professional force of painters to live in the UAE and long-term plans for urban and sustainable progression under Dubai’s Urban Master Plan 2040 deserve to incentivise investors seeking a stable stream of income, while measures to increase transparency and reporting in the Real Estate Sector and restructuring entities are expected. Government to increase power and enhance the experience of investors further adorn the confidence of investors. However, the report notes that the UAE Central Bank has raised interest rates in parallel with the US Federal Reserve. that higher interest rates are expected for customer spending for the remainder of 2022 and 2023.
The “KSA H2 Real Estate Outlook 2022” shows that Saudi Arabia’s real estate market has recovered strongly after the coronavirus-induced slowdown, as evidenced by the 0. 4% year-on-year (y/y) increase in the real estate value index in the first quarter of 2022, basically due to a year-on-year accumulation of 1. 8% in the value of residential land. The value of soil has been solid in recent years, showing slight growth. Several measures taken through the government, such as securing homeownership for all nationals and the creation of mandatory regional headquarters for foreign companies, have also given a new impetus to the real estate sector. In addition, other government projects such as Sakani, which allows Saudi citizens to own their first home, and the Wafi sale-rent scheme have boosted demand for affordable housing. He also notes that Saudi Arabia’s new giga projects, which add NEOM, Red Sea Project and Riyadh’s Diriyah Gate, signify a shift in clients’ personal tastes and g real estate development in uino.
Although Saudi Arabia’s real estate value index is still below its 2015 highs, it has stabilized in recent quarters. Residential transaction volumes fell by 23. 4% in the first quarter of 2022 compared to the first quarter of 2021 and the overall cost of transactions also decreased. 1,9%. On the other hand, workplace sector functionality improved across the Kingdom in the first quarter of this year, with average rents for Category A and Category B work buildings expanding in Riyadh and Jeddah by 8% and 3% respectively. In the retail sector, however, rents of super-regional and regional grocery malls fell by 5% and 7% respectively in Riyadh, and by 1% and 5% in Jeddah. , the hotel sector has performed well in the Kingdom, especially in Riyadh, and is expected to improve further the rest of the year.
While the Kingdom’s economic momentum is expected to continue through 2022 thanks to an expected increase in oil production, the national report forecasts that the real estate sector will show greater stability with the possibility of a slight acceleration in this part of the year. The solid expansion in the oil sector, the development of domestic investment in non-oil sectors through the country’s sovereign wealth fund, the Public Investment Fund, increased personal recruitment and an accumulation in devoted tourism due to the easing of restrictions are expected to be important again. positive factors for the economy and the real estate sector. On the other hand, emerging interest rates, which are expected to have a negative effect on mortgages and reduce customer spending, and weak global signals are again the main obstacles.
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About the Kuwaiti Monetary Center “Markaz”
Established in 1974, Kuwait’s K. P. S. C financial center “Markaz” is one of the leading investment banking and asset control establishments in the MENA region with total assets under control of more than KD 1. 17 billion as of March 31, 2022. Over the years, Markaz has pioneered innovation through new concepts that led to the creation of new investment channels. These channels have unique features and have helped Markaz broaden investors’ horizons. Examples come with Mumtaz (the first national mutual fund), Idikhar (the first cash market fund in Kuwait), MREF (the first real estate investment fund) and Forsa Financial Fund (the first and only market maker of GCC characteristics since 2005), all conceptualized, established and controlled through Markaz. Markaz indexed in Boursa Kuwait in 1997.
For information, please contact: Sondos Saad Media
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