Wed 12 Feb 2025
GCC Real Estate Outlook 2025: Strong Growth Expected in UAE, Saudi Arabia & Kuwait
The real estate markets in the UAE, Saudi Arabia, and Kuwait are poised for significant growth in 2025, according to the latest report from Kuwait Financial Centre “Markaz.”
Markaz’s latest real estate market analysis examines trends from H2 2024 and provides a forward-looking outlook for H1 2025, highlighting key economic drivers shaping the sector.
GCC Real Estate Market Insights
With macroeconomic stability, easing interest rates, and strong government policies fueling confidence, Markaz predicts continued expansion across the GCC real estate sector.
Key factors driving this growth include:
✔️ Lower borrowing costs boosting property demand.
✔️ Government-backed reforms fostering investor confidence.
✔️ Increased investment activity reinforcing market stability and expansion.
Despite short-term fluctuations, the long-term outlook remains positive, presenting lucrative opportunities for real estate investment and development in the region.
UAE Real Estate Market Outlook 2025
The UAE real estate market saw record-breaking activity in 2024, with total sales reaching AED 457 billion ($124.4 billion) by mid-November—an 11% increase from 2023 and a 72% rise from 2022.
Dubai continues to attract global investors, thanks to favorable policies like the Golden Visa, making it one of the most desirable property markets. The UAE’s non-oil economy is expected to grow steadily in 2025, supported by tourism and real estate.
With high rental yields—6.4% in Dubai and 5.8% in Abu Dhabi—the country remains more affordable than other global cities like Hong Kong, Singapore, and London, further boosting investor interest.
The UAE’s real GDP is projected to grow by 5.1% in 2025, driven by the non-oil sector and a 6.7% rebound in oil GDP. Dubai’s Real Estate Sector Strategy 2033 aims to:
Increase total real estate transactions to AED 1 trillion ($227.2 billion)
Contribute AED 73 billion ($20 billion) to Dubai’s GDP
Expand the real estate portfolio 20-fold
The demand for off-plan properties and growth in the residential, office, and hospitality sectors will continue to drive the real estate market through H1 2025.
Saudi Arabia Real Estate Market Outlook 2025
Saudi Arabia’s real GDP growth showed signs of recovery in 2024, with quarterly GDP rebounding from -4.3% in Q4 2023 to 2.8% in Q3 2024. This growth reflects strong momentum in tourism, real estate, and construction.
The real estate price index increased by 2.9% year-on-year in Q3 2024, driven by a 1.6% rise in residential land prices and a 6.4% surge in commercial sector values. The commercial real estate segment has particularly benefited from rising demand amid strong non-oil economic growth.
Saudi Arabia is expected to face a fiscal deficit of 3.4% of GDP in 2025, with the national budget forecasting a 6.8% decline in non-tax revenue, mainly due to lower oil earnings resulting from OPEC+ production cuts.
However, government-backed infrastructure and giga projects continue to fuel real estate growth. The successful bid to host the FIFA World Cup 2034 is expected to boost demand in hospitality, residential, and commercial developments.
In 2025, Saudi Arabia’s real GDP is projected to grow by 4.6%, with a 4.4% expansion in the non-oil sector. Oil GDP is also set to recover as OPEC+ production cuts ease gradually.
With investor confidence rising and government-led initiatives driving market expansion, Saudi Arabia’s real estate sector is expected to maintain strong momentum through H1 2025.
Kuwait Real Estate Market Outlook 2025
Kuwait’s real estate sector maintained a steady recovery in 2024, particularly in the investment and commercial segments.
- Investment sector land prices rose 3.3% year-on-year in Q3 2024, reflecting positive investor sentiment.
- Commercial land prices saw a strong 7.6% increase over the same period.
- The residential segment continued to struggle, with land prices declining 3.3% year-on-year in Q3 2024.
- Rental rates for apartments experienced moderate growth, while office rental values remained stable.
Looking ahead to 2025, Kuwait’s real GDP is projected to grow by 3.3%, marking a solid rebound from the estimated -2.7% contraction in 2024. This growth is expected to be driven by increased project activity and expanding credit growth, further boosting demand for commercial real estate.
With macroeconomic indicators showing continued improvement, the Markaz Real Estate Macro Index score for Kuwait stands at 3.5 out of 5.0, signaling sustained market confidence and growth potential.
The first half of 2025 is expected to bring further acceleration, with land prices and rental rates rebounding, supported by ongoing government reforms and a strengthening economic landscape.