DUBAI: Gulf real estate markets continued to power ahead in early 2025, driven by strong investor appetite and diversification initiatives, Markaz said in its latest market outlook. The report noted that despite fiscal pressures in some economies, the region’s property sector is underpinned by resilient demand and large-scale development projects.

Dubai leads on global stage

The UAE’s property market posted the strongest gains among GCC peers. Transaction values reached AED 239 billion ($65 billion) in the first quarter of 2025, with Dubai contributing AED 142 billion from 45,077 transactions — a 30 per cent year-on-year rise.

For the full year 2024, Dubai registered AED 761 billion in real estate sales, up 20 per cent from the previous year. The city also recorded 226,000 transactions (a 36 per cent jump) and welcomed more than 110,000 new investors, a 55 per cent increase.

Rental yields in Dubai and Abu Dhabi continued to outpace global benchmarks, with Dubai at 7.6 per cent in May 2025, compared with 5.3 per cent in New York, 3.2 per cent in Singapore, and 3.1 per cent in London.

Saudi Arabia sustains momentum

Saudi Arabia’s property market also showed strong growth, supported by the Kingdom’s diversification drive. Real estate sales rose 37 per cent year-on-year in the first quarter, while the property price index gained 4.3 per cent. Residential prices climbed 5.1 per cent and commercial values increased 2.5 per cent, reflecting firm demand for both housing and office space amid non-oil economic expansion.

Markaz, however, cautioned that Saudi Arabia’s fiscal deficit is projected to widen to 4.9 per cent of GDP in 2025 from 2.8 per cent last year due to lower oil revenues. Despite this, Riyadh has signaled its commitment to maintaining investment levels in diversification projects, which is expected to support long-term real estate growth.

*Kuwait sees broad-based recovery *
Kuwait’s property market recorded a solid rebound in the first quarter of 2025, with broad-based gains across all segments. Real estate sales hit KD 896 million ($2.9 billion), up 45 per cent year-on-year.

Investment sales jumped 49 per cent, residential sales climbed 38.5 per cent, and commercial sales rose 22.9 per cent. The number of overall transactions grew 20.9 per cent, with commercial deals soaring 163.6 per cent and investment transactions increasing 29.7 per cent — trends supported by growth in the expatriate population.