The Gulf Cooperation Council’s (GCC) real estate sector is set to experience growth in the first half (H1) of 2024.
A recent report by the Kuwait Financial Center (Markaz) shows Kuwait and Saudi Arabia getting 2.9 and 3.55 on the Markaz Real Estate Macro Index, respectively, for the forecast period. These numbers are slightly up compared to the H2 2023 scores of 2.8 for Kuwait and 3.55 for Saudi Arabia.
According to the report, the growth is driven by stable oil prices and increased property demand. It further said that the broader GCC’s robust economic growth and supportive government policies will further boost the region’s real estate sector’s growth.
Kuwait’s real estate market
Expectations for Kuwait’s economic growth are positive, with a projected non-oil sector growth rate of 3.5 percent. Stable interest rates, along with steady oil prices, will further boost this growth.
However, housing rent experienced a 3.4 percent year-on-year increase in 2023. Meanwhile, credit growth to the private sector slowed down from 9.1 percent to 2.5 percent year-on-year in October 2023. Despite this, the likelihood of interest rates peaking and continued momentum in project activity could support credit growth in the first half of 2024.
With such prospects in the horizon, Kuwait’s real estate market could grow in the first half of 2024. While there was a decline in residential sales and transaction volumes in 2023, Markaz expressed confidence in the stability of Kuwait’s and the GCC’s real estate sector as a whole for 2024.
Saudi Arabia’s projections
In Saudi Arabia, the report anticipates improved economic growth in 2024. Robust performances in both the oil and non-oil sectors in Saudi will boost the economy, with real GDP growth projected at 4 percent year-on-year.
In addition, increased demand for oil, moderate inflation levels, and low unemployment rates will further enhance the kingdom’s economic performance. These, along with robust non-oil activities coupled with active government spending, could further accelerate the performance of the kingdom’s real estate sector, which will in turn help improve the GCC region’s real estate sector outlook as a whole.
Read: How to invest in Dubai real estate in 2024
GCC real estate sector
The positive outlook for Kuwait and Saudi Arabia’s real estate markets bodes well for the GCC region. With stable oil prices, strong economic indicators, and supportive government policies, the GCC real estate sector is set for growth in the first half of 2024. Investors and stakeholders in the region can anticipate increased activity and opportunities in the coming months. This will contribute to the overall economic resilience and development of the GCC countries.
For more real estate news, click here.
