The Gulf Cooperation Council’s (GCC) real estate market witnessed notable growth in 2024, with transactions surpassing $383 billion. Overall, the region’s transactions grew by an estimated 25 percent last year, highlighting the sector’s growing appeal among residents and investors alike.
In its first-ever residential market report, Sakan revealed that Dubai’s share of the GCC region’s transactions reached 54 percent at $207 billion. Meanwhile, Saudi Arabia’s real estate market recorded $75.7 billion in transactions last year, taking a 14 percent share. Saudi Arabia, Sharjah, Kuwait and Oman witnessed significant growth rates in yearly transactions, ranging between 30 percent and 47 percent.
“The GCC real estate market stands at an exciting crossroads, with unprecedented growth opportunities shaping the future of our region. As we enter 2025, the industry continues to benefit from a combination of robust government initiatives, increased international interest, and a renewed focus on innovation,” stated Abdulla Al-Saleh, CEO of Sakan.
Factors propelling GCC real estate market’s boom
One of the major factors driving real estate growth in the GCC region is population growth. The number of people living in cities in the GCC is expected to grow by 30 percent between 2020 and 2030. The UNDP said 84.3 percent of the GCC population will be residing in urban areas by 2030.
Some cities are growing faster than others. In Riyadh, Knight Frank estimates that the city’s population will increase by 4.1 percent annually to reach 9.6 million by the end of the decade, with 5.5 million expats and 4.1 million Saudis. Urban planners anticipate that giga projects will stem the flow of rural migration to cities.
Dubai is another city witnessing a population boom. Between 2010 and 2024, Dubai’s population doubled from 1.91 million to 3.83 million. The emirate is likely to add 2.5 million more people by 2040.
A major driver of this population growth and housing demand in the GCC is the expatriate movement. There are approximately 30 million expats in the region, representing 52 percent of the population. While expats have mostly been an important market for residential property leasing, their role in the economy and the property market has been changing.
Expats are now becoming investors and business owners, prompting a shift from leasing properties to acquiring real estate. Dubai has been very responsive to this trend, announcing 457 plots available for freehold conversion in January 2025. Expats are also bringing their families to the GCC, which increases the population and subsequently the number of consumers in the economy. In countries where expats can bring their families, remittances are declining despite the growing expat population as seen in the UAE.
Dubai leads super-prime deals
New developments across the GCC real estate sector continue to compete for the most luxurious residential experience. In the GCC, Dubai leads in the number of super-prime deals, closing 388 property transactions worth more than $10 million in the 12 months leading to Q3 2024. Other markets offering super-prime developments include Qatar with its Qetaifan Island North and Saudi Arabia with its The Red Sea Project.
Another product that has become popular in the GCC region’s real estate sector is branded residences. The Middle East has 12 percent of the global supply of these developments, according to Savills. In Dubai alone, which boasts 121 branded residences either completed or in the pipeline, 12.6 percent of the aggregate transaction value of the emirate in 1H 2024 was attributed to branded residence transactions, according to Morgan’s International Realty.
Robust demand drives price growth
UAE and Qatar apartments are among the most expensive in the GCC real estate sector. However, apartment prices in Riyadh are catching up, rising by 8 percent in 2024, with the largest price appreciation seen in North Riyadh, according to Knight Frank.
In Dubai, robust demand for property has continued to boost apartment prices, which rose by 19.5 percent by late 2024, according to Global Property Guide. On the other hand, some markets are facing headwinds. Oman apartment prices fell by close to 13 percent in Q3 last year, according to the National Center for Statistics and Information, although industry players remain optimistic.
Meanwhile, Bahrain, Oman and Saudi Arabia offer some of the most affordable villas in the GCC, while the UAE, Qatar and Kuwait remain on the high side.
Among the most dynamic markets for villas include North Riyadh, where prices have grown year-on-year between 14 and 17 percent, and Dubai, where price appreciation ranged between 9 and 47 percent. Meanwhile, Bahrain’s high-end villas saw a decline in prices in early 2024 by 4.5 percent year-on-year.
Read: Sharjah real estate transactions surge to $1.91 billion in January 2025
Region’s average apartment yield hits 6.8 percent
The GCC’s average apartment yield by the end of 2024 was at 6.8 percent, according to Sakan’s research. This puts the GCC on a competitive level for investors who are looking at safe havens for property investments. On average, the GCC’s one-bedroom apartment yield (7.2 percent) outranked that of two bedrooms (6.8 percent) and three bedrooms (6.4 percent).
High-yield countries include Saudi Arabia at 7.8 percent, Kuwait at 7.9 percent, and Bahrain at 7.9 percent. The strong leasing market seen in Riyadh and the fast-rising rents have been beneficial for Saudi yields. Meanwhile, Kuwait and Bahrain both have high price-to-income ratios, which favor renting over owning houses.
