· UAE and Saudi remain the most buoyant markets in 2013
· Demand to remain strong particularly for high-quality properties
UAE
UAE’s real estate market remains on the path to recovery, with robust growth in rentals and sales prices across the markets of Dubai and Abu Dhabi. Prices increased 12%YoY in Dubai’s residential rental market, while Abu Dhabi’s market saw prices rise 10%YoY. In the hospitality segment, Dubai’s occupancy levels increased 2 percentage points to 85% in 2Q13, while those of Abu Dhabi rose 8 percentage points to 70%. Office rentals rose up to 8%QoQ in Dubai, while Abu Dhabi saw rates stabilizing during the quarter. Strong economic fundamentals and improving market sentiments continue to drive the real estate market in the country.
Saudi Arabia
Saudi Arabia’s real estate market showed signs of growth across markets in 2Q13 after posting a mixed performance in 1Q13. Housing and hospitality segments remained upbeat, driven by strong government expenditure. However, Riyadh’s office market continues to be a concern due to the oversupply situation. While the housing and hospitality segments are expected to maintain the uptrend, the office segment could come under pressure due to new stock of supply in the medium term.
Bahrain
Bahrain’s office and residential rental markets showed signs of recovery in 2Q13. However, rise in demand remained restricted to high quality properties. The office and residential markets witnessed improved demand, which is expected to translate into higher rents in the next quarter. The residential sales market turned buoyant during the quarter, with many Bahrainis purchasing property for investment purposes.
Kuwait
Overall traded value of real estate properties grew 36.8%QoQ and 15.9% YoY to KWD1,048.5mn in 2Q13, mainly aided by government spending and improving market sentiments. However, the market witnessed a 13.1%YoY fall in transactions, indicating a decline in demand due to rising prices of land and, thereby, properties.
Oman
The real estate market has continued to recover in 2Q13, primarily driven by the residential and retail segments. The segments witnessed increased demand during the quarter due to improvements in the economy and consumer confidence. The office market showed signs of stabilization, as rates remained unchanged over the last two quarters.
Qatar
Qatar’s real estate market remained buoyant in 2Q13. The residential market continued to pick up due to an undersupply situation. Residential sales transactions also reached a multi-year high; however, sales prices remained unchanged. On the other hand, office rentals remained unchanged and we expect the trend to continue due to existing oversupply.
