The Gulf Real Estate Sector Continues Momentum in 2025

The real estate sector in the Gulf countries is experiencing its historic peak, with market size in various countries, led by Saudi Arabia, the UAE, and Qatar, reaching unprecedented levels, supported primarily by economic diversification plans aimed at reducing dependence on energy and supporting non-oil sectors.

The sector in the GCC witnessed a dynamic year in 2024, with real estate prices witnessing a significant increase due to increased demand in the hospitality and retail sectors. The influx of international visitors contributed to boosting tourism and retail performance.

Looking ahead to 2025, several factors are expected to influence the future of the Gulf real estate market. Efforts to diversify the economies of the six countries, coupled with population growth and demographic shifts, are leading to increased demand for residential and commercial real estate.

Qatari Steps

A local Qatari report considered contracts related to new projects related to infrastructure, education, health, communications, and information technology, scheduled for implementation in 2025, to be the main focus for enhancing the growth of the construction sector in Qatar.

A report by Al Asmakh Real Estate Projects Company (January 18, 2025) indicated that approximately 3,300 tenders were issued this year, covering more than 189 economic activities, with a value of SAR 56.2 billion ($15.4 billion). SAR 21.9 billion of this value was allocated to municipal and environmental tenders, including infrastructure works for the development of new and existing citizens' lands.

The value of weekly real estate transactions from January 5 to 9 recorded a high performance, reaching SAR 292 million ($79.97 million), across 71 transactions, compared to SAR 261 million ($71.48 million) during the period from December 29 to January 2.

Saudi Arabia: Continuous Rise

Real estate prices in Saudi Arabia also recorded their fastest rise since mid-2023 during the last quarter of 2024, with the index rising by 3.6% year-on-year, driven by a 3.1% jump in residential property prices, according to the General Authority for Statistics.

Saud Al Sulaimani, Regional Director of JLL Saudi Arabia, says the outlook for the Kingdom's real estate sector looks positive for 2025, with projects valued at more than $1.4 trillion under development.

Al Sulaimani described 2024 as a "historic" year for the Kingdom's real estate sector, with residential sales prices rising by 12% and rents by 10%, and office property prices increasing by 21%. This is in addition to a 656% increase in leisure tourists visiting Saudi Arabia, which has had a positive impact on hotel properties.

Demand in the UAE

The prospects for the UAE's commercial real estate market appear bright for the coming year, particularly with the shift in focus towards green buildings and luxury offices, with Dubai clearly outperforming the market despite external risks resulting from high interest rates and a slowing global economy, according to Bloomberg Intelligence.

Estimates indicate that strong demand for office space in the UAE will continue, supported by factors including the country's efforts to consolidate its position as an international hub for a range of economic sectors.

Demand for real estate in Dubai is also expected to rise after the government's handling of the COVID-19 pandemic and flexible visa procedures attracted a large number of foreign buyers.

Stable Growth

Economic researcher Ahmed Eid expects the real estate sector in the Gulf countries to witness "stable growth this year, supported by infrastructure projects and major investments."

Regarding the Gulf countries and their projects, he says: "Saudi Arabia is leading the transformation with mega-projects such as NEOM, while the UAE is focusing on smart and sustainable real estate to attract investors. In Qatar, the post-2022 World Cup legacy and sporting events are supporting the development of areas such as Lusail and eco-friendly buildings, with demand increasing thanks to foreign ownership laws."

He added to Al-Khaleej Online: "Kuwait is focusing on strengthening the mid-market housing market to meet the needs of both local and expatriate residents, while Bahrain is seeking to attract investments through distinctive commercial areas and laws that support foreign ownership."

Regarding Oman, he notes that it "focuses on developing tourism and industrial real estate, taking advantage of its strategic location and projects linked to Vision 2040."

He emphasizes that technology and sustainability "are key factors supporting the sector's growth, with a shift toward green construction and smart real estate," adding, "Tourism and major events, such as the 2027 Asian Cup in Saudi Arabia, boost demand for hotels and entertainment properties. However, the region faces challenges such as rising global interest rates and the potential for oversupply."

He also explains that the Gulf states "are seeking to provide an attractive investment environment through ownership laws and long-term residency permits, which will support the real estate sector in the long term."

Advanced Growth

Meanwhile, writer and economic analyst Saeed Khalil Al-Absi says that all expectations indicate that real estate in the Gulf states "will maintain its growth, development, and expansion in activities in the coming years, especially this year."

He told Al-Khaleej Online that these expectations are based on "the strength of the Gulf states' economies, government initiatives and facilitations, and the provision of everything necessary to develop this important sector for their economies."