Dubai real estate market soars amid record residential transactions in 2023: report 

Dubai real estate market soars amid record residential transactions in 2023: report 
CBRE also noted a moderation in rental rates in Dubai in 2023, despite sustained high demand. Shutterstock
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Updated 21 February 2024
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Dubai real estate market soars amid record residential transactions in 2023: report 

Dubai real estate market soars amid record residential transactions in 2023: report 

RIYADH: Dubai’s real estate market experienced robust growth in 2023, reaching an all-time high with residential transactions totaling 118,993 units, a report from CBRE revealed. 

The report highlighted a 29.6 percent year-on-year increase in deal volumes, driven by growth in both the off-plan market and secondary deals. 

Off-plan residential properties are purchased before construction, while the secondary market involves resale properties, existing homes, and established housing areas. 

“The UAE’s residential market ended the year on a strong note, where the elevated levels of demand continue to drive performance,” said Taimur Khan, head of research at CBRE.  

He added that the robust levels of activity and high absorption rates, which have reduced available supply, will “continue to support price growth in both Abu Dhabi and Dubai in the year ahead.” 

The report highlighted a 20.1 percent increase in average apartment prices in Dubai, and a 19.8 percent and 21.8 percent rise in apartment and villa prices, respectively, in the year to December 2023. 

CBRE also noted a moderation in rental rates in Dubai in 2023, despite sustained high demand. 

“The rate of rental growth has softened throughout the year, where in the year to December 2023, average residential rents in Dubai increased by 18.9 percent, down from the 19.2 percent growth registered in November 2023,” stated the CBRE report. 

The real estate consultancy firm added that Abu Dhabi also witnessed robust growth in residential transactions in the previous year. 

The capital city recorded a 77.8 percent surge in the total volume of residential transactions in 2023, reaching 11,235 compared to the previous year. 

This surge was propelled by a 104 percent growth in off-plan market sales and a 27.7 percent increase in secondary deals. 

The report noted a 2 percent increase in average apartment rents in Abu Dhabi, while villa rents saw a marginal rise of 0.8 percent in the year to the fourth quarter of 2023. 

CBRE projects that the average annual rents for apartments and villas in Abu Dhabi will be 64,996 dirhams ($17,695) and 163,098 dirhams, respectively, by the end of 2024. 

“In terms of rental growth, we expect that rental rates in Abu Dhabi will continue to rise, with prime areas set to outperform the market. In Dubai, we expect that rental growth will continue to moderate, however, still remain positive in 2024,” added Khan.  

On the supply side, a total of 39,190 residential units were estimated to have been delivered in Dubai in 2023, with 34.4 percent of this supply located in Meydan One, Downtown Dubai, and Business Bay.

An additional 68,880 units are expected to be handed over in 2024. 

On the other hand, a total of 2,961 units were delivered in Abu Dhabi in 2023, with 59.4 percent of them being handed over in Shams Abu Dhabi and Najmat Abu Dhabi. 

In 2024, CBRE added that an additional 4,438 units are anticipated to be completed in Abu Dhabi, with 69.1 percent of this new stock expected to be delivered in Yas Island and Al Maryah Island. 

In a separate report, UK real estate services firm Savills noted that the industrial and logistics sector in Dubai stood out as one of the most resilient real estate asset classes in the city. The market remained robust in 2023 due to the expansion of the non-oil sector. 

Savills added that in 2023, there continued to be a shortage of good-quality assets, especially larger facilities exceeding 10,000 sq. m., as occupiers expanded their warehouse footprint. 

The report highlighted a particularly strong demand for built-to-suit warehousing space from companies, reflecting their strategic planning for future expansions and investments in modern warehouse facilities. 

“Companies from the FMCG (fast moving consumer goods), 3PL (third party logistics), retail, and e-commerce sectors were the most active occupiers in 2023,” said Michael Fenton, director of industrial and logistics and Savills Middle East.  

He added: “Along with existing occupiers, we saw strong inquiry levels and transactions from new entrants to the market, particularly from the Asia Pacific region, which included the manufacturing sector, as opportunities arose to produce and source locally.”  


World Bank raises Saudi Arabia’s 2025 GDP growth forecast to 5.9%

World Bank raises Saudi Arabia’s 2025 GDP growth forecast to 5.9%
Updated 15 April 2024
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World Bank raises Saudi Arabia’s 2025 GDP growth forecast to 5.9%

World Bank raises Saudi Arabia’s 2025 GDP growth forecast to 5.9%

RIYADH: The World Bank has raised its expectations for Saudi Arabia’s economic growth to 5.9 percent in 2025 from 4.2 percent predicted earlier in January.

In its latest report the bank, however, revised its 2024 forecast for the Kingdom’s gross domestic product growth downward to 2.5 percent from an earlier forecast of 4.1 percent.

Concurrently, the overall GDP growth forecast for Gulf Cooperation Council countries in 2024 has been reduced to 2.8 percent, down from 3.6 percent, while the 2025 forecast has been revised to 4.7 percent from 3.8 percent.  

The report also adjusted the UAE’s GDP growth forecast to 3.9 percent for 2024, up from the previously projected 3.7 percent, with a further rise to 4.1 percent in 2025, from 3.8 percent. 

Kuwait’s economy is expected to expand by 2.8 percent in 2024 and increase further to 3.1 percent in 2025.  

Similarly, Bahrain’s economy is likely to grow by 3.5 percent in 2024 and 3.3 percent in 2025, marking an increase from January’s projections. 

Meanwhile, Qatar’s economy saw a downward revision for its 2024 forecast from 2.5 percent to 2.1 percent but an upward revision for 2025 from 3.1 percent to 3.2 percent. 

Oman’s economy projections for 2024 and 2025 saw a marginal increase of 0.1 percent since the January forecast. 

This adjustment reflects the broader economic trends where the surge in oil prices following Russia’s invasion of Ukraine in 2022 bolstered oil-exporting economies in the Middle East and North Africa.  

In contrast, economic growth in non-oil-exporting nations — including MENA oil importers like Djibouti, Jordan, Morocco, Tunisia, and the West Bank and Gaza — has slowed. 

By 2024, the growth disparity between GCC oil exporters and developing oil importers is expected to narrow to just 0.9 percentage points, marking a significant shift from 2022 when GCC countries grew 5.6 percentage points faster, the report stated.  

“Developing oil exporters will grow 2.8 percent in 2024, down from 3.1 percent in 2023 while growth in developing oil importers is forecasted to decrease to 2.5 percent in 2024, down from 3.1 percent in 2023,” the report stated. 

Overall, the MENA region is expected to achieve a growth rate of 2.7 percent in 2024, which aligns with pre-COVID levels but still trails the global average.  

While other emerging markets and developing economies are also projected to remain below pre-pandemic growth rates, they are expected to surpass the MENA region by 1.2 percentage points in 2024.  


GCC oil companies’ capex to grow by 5% to reach $115bn in 2024

GCC oil companies’ capex to grow by 5% to reach $115bn in 2024
Updated 15 April 2024
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GCC oil companies’ capex to grow by 5% to reach $115bn in 2024

GCC oil companies’ capex to grow by 5% to reach $115bn in 2024

RIYADH: The capital expenditures of national oil companies in the Gulf Cooperation Council are likely to grow by 5 percent in 2024 as compared to the previous year and are expected to reach $115 billion, according to a report.

The analysis by S&P’s Global Ratings, however, does not take into account the potential surge in spending from recent expansion plans such as the North Field West Project in Qatar, which it said could significantly boost expenditures.

The report highlighted that while the growth in capital expenditure is modest, Saudi Arabia’s planned output cuts in line with the current policy of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, is likely to decrease demand for drilling platforms, operating ratios, average daily production rates, and profitability among regional drilling companies, especially in the Kingdom.

“We stress-tested the effect of a hypothetical 15-20 percent loss of total rig demand in the region on GCC drillers, and we estimate that the debt to EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) of rated and publicly listed drillers based in GCC countries could increase by about 1x on average,” S&P Global Ratings Credit analyst Rawan Oueidat said.

“At this point, we think that drillers’ rating headroom could shrink, but we don’t expect any short-term rating pressure,” Oueidat added.

The agency also raised concerns about the future of capital expenditure in other oil and gas-producing countries of the GCC, following Saudi Aramco’s decision to suspend its plan to increase the Kingdom’s maximum production capacity.

Despite these concerns, the total oil capital expenditure in the region is expected to remain relatively high due to the ongoing expansion plans in Qatar and the UAE.

However, the pace and magnitude of spending are expected to impact oilfield service companies and the entire value chain, particularly drilling companies whose business models heavily rely on corporate capital expenditures.

The UAE’s Abu Dhabi National Oil Co. is set to increase its oil production capacity to 5 million barrels per day by 2027, up from 4 million bpd as of February 2024, according to the US Energy Information Administration.

Meanwhile, Qatar is aiming to boost its liquefied natural gas production capacity to 142 million tonnes annually by 2030 from the current output of 77 million tonnes.

The report predicted oil prices to average $85 per barrel for the remainder of 2024 and $80 per barrel the following year.

It also suggested that geopolitical tensions and planned production cuts by OPEC+ will support prices and enhance the cash flows of oil companies across the Gulf region.


Saudi housing program Sakani benefits over 32,000 families in Q1

Saudi housing program Sakani benefits over 32,000 families in Q1
Updated 15 April 2024
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Saudi housing program Sakani benefits over 32,000 families in Q1

Saudi housing program Sakani benefits over 32,000 families in Q1

RIYADH: As many as 32,343 Saudi families benefitted from Sakani’s housing options during the first quarter of 2024, marking an annual 15 percent increase.

In collaboration with the Real Estate Development Fund and financial institutions, the program provides a variety of housing support packages to encourage first-time house buyers, including non-refundable financial assistance of SR100,000 ($26,659) or SR150,000.

The number of the Kingdom’s households that purchased their first homes reached 25,391 in the first three months of the year, reflecting the objective of Sakani to offer a variety of residential options and financial solutions.

Founded in 2017 by the Saudi Ministry of Housing and the Real Estate Development Fund, the program aims to increase the proportion of families that own a home in the Kingdom to 70 percent by 2030, in line with the economic diversification strategy Vision 2030.

Figures from Sakani showed that the number of beneficiary households reached 12,184 in March, with 9,381 Saudi families obtaining their first residence.

In January, Sakani announced that more than 100,000 Saudi families benefited from the initiative in 2023, while the number of applicants who obtained their first home over that 12 month period reaching 98,475.

The core objectives of the Sakani initiative are to enable homeownership in the Kingdom by creating new housing stock, assigning plots and properties to citizens, and providing financing for their purchases.

The Sakani website and application provide a wide range of housing facilities and services, such as real estate consultancy, issuance of real estate transaction tax certificates and a display of financing institution rates.

It also provides electronic financing and the disbursement of land contracts, engineering design services, access to certified contractors, and additional services.


Qatar inflation dips 1.4% in March: official data

Qatar inflation dips 1.4% in March: official data
Updated 15 April 2024
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Qatar inflation dips 1.4% in March: official data

Qatar inflation dips 1.4% in March: official data

RIYADH: A fall in food and beverage prices helped drive Qatar’s inflation down 1.4 percent in March as compared to the previous month, official data showed.

According to a report released by the country’s Planning and Statistics Authority, the consumer price index reached 106.67 points in March.

Compared to February, expenses for food and beverages slid by 4.74 percent in March. Prices for recreation and culture witnessed a decline of 5.58 percent during the same period. 

Similarly, costs for restaurant and hotels, as well as furniture and household equipment, decreased by 1.92 percent and 0.34 percent, respectively, in March compared to the previous month. 

On the other hand, prices for clothing and footwear increased by 1.88 percent, followed by expenses for transport, which went up by 0.23 percent. 

Cost of healthcare and communication remain unchanged in March, data showed.

However, the Gulf country’s annual consumer price index edge up by 0.98 percent in March compared to the same month of the previous year.

The year-on-year surge in prices was driven by recreation and culture (8.48 percent), communication (3.84 percent), education (3.48 percent), food and beverages  (2.73 percent), furniture and household equipment (1.28 percent), and miscellaneous goods and services (0.83 percent).

A year-on-year decrease has been recorded in the prices of  clothing and footwear, followed by housing, water, electricity and other fuel. 

Qatar’s economy is expected to stabilize in the near future after experiencing a surge in 2022 due to hosting the FIFA World Cup, according to the IMF.  

The Washington-based lender has forecasted a 1.9 percent growth in the country’s gross domestic product for 2024. 

Highlighting Qatar’s resilience to recent global disturbances, the IMF stated that the country’s economic prospects are promising. 

Furthermore, it noted that the Hamas-Israel conflict has not had any discernible impact on Qatar. 

“Risks are broadly balanced. Maintaining prudent macroeconomic policy and intensifying reform efforts will support Qatar’s resilience to shocks and accelerate its economic transformation,” the IMF said. 


Closing Bell: TASI gains 41 points to close at 12,708, reaches $2.59bn trade volume  

Closing Bell: TASI gains 41 points to close at 12,708, reaches $2.59bn trade volume  
Updated 15 April 2024
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Closing Bell: TASI gains 41 points to close at 12,708, reaches $2.59bn trade volume  

Closing Bell: TASI gains 41 points to close at 12,708, reaches $2.59bn trade volume  

RIYADH: Saudi Arabia’s Tadawul All Share Index closed at 12,708.34 points on Monday, gaining 41.44 points, or 0.33 percent.  

The parallel market Nomu also gained 158.48 points, or 0.6 percent, to conclude at 26,548.59.   

However, the MSCI Tadawul 30 Index fell 4.77 points – 0.3 percent – to finish at 1,610.23.  

The main index posted a trading value of SR9.7 billion ($2.59 billion), with 172 stocks advancing and 54 declining. On the other hand, Nomu reported a trade volume of SR103.7 million.  

Saudi Cable Co. was the top performer on TASI as its share price surged 9.89 percent to SR77.80. Saudi Chemical Co. followed next with its share price jumping 7.62 percent to close at SR8.19.  

Salama Cooperative Insurance Co. was also among the top performers, climbing 7.19 percent to SR33.55. Al-Etihad Cooperative Insurance Co. and Al Yamamah Steel Industries Co. increased 6.82 and 6.81 percent to SR26.15 and SR42.35, respectively.  

Conversely, Saudi Tadawul Group Holding Co. recorded the most significant dip, declining 2.73 percent to SR270.40.  

Arabian Internet and Communications Services Co. and the National Co. for Glass Industries also experienced setbacks, with their shares dropping to SR368.20 and SR45.90, reflecting declines of 2.33 and 2.24 percent, respectively. Bupa Arabia for Cooperative Insurance Co. and Saudi Awwal Bank also reported significant losses.  

Nomu’s top performer was Abdulaziz and Mansour Ibrahim Albabtin Co., which saw a 9.49 percent jump to SR45. Amwaj International Co. and Meyar Co. also recorded notable gains, with their shares closing at SR55.60 and SR73.90, marking an increase of 8.59 and 5.57 percent, respectively. Alqemam for Computer Systems Co. and Professional Medical Expertise Co. also fared well.  

Raoom Trading Co. was the worst performer on the parallel market, declining by 7.72 percent to SR145.80. Other underperformers included Al Mohafaza Co. for Education and Mohammed Hasan AlNaqool Sons Co., whose share prices dropped 4.67 percent and 3.68 percent to SR20.80 and SR44.50, respectively.  

Alhasoob Co. and Mulkia Investment Co. declined during the day to settle at SR67.20 and SR34, respectively.