Price performance in the GCC’s residential sector was fragmented in 2022. First, on a positive note, where we have seen prices decline, it has been relatively marginal. However, price growth in Dubai and Riyadh have significantly outpaced the regional average. In 2022, the UAE was the only market to record price growth and transaction volume growth across all cities and sectors. In Dubai, whilst we do expect transaction volumes to soften year-on-year, we expect that prices will continue to increase, across both the apartment and villas segments of the market, albeit at a slower rate. In Abu Dhabi, we are forecasting growth in both the volume of transactions and the rate of price growth over the course of the coming year.

In Bahrain, villa prices are expected to record low-single digit price growth. In the apartment segment of the market, given new launches and existing levels of supply, prices are forecast to decrease more substantially.

In Saudi Arabia, price performance in both the apartment and villa segment of the market is forecast to become more polarised over the coming year. Villa prices are expected to continue to increase, albeit at slower rates, whereas apartment prices are likely to continue to soften. However, we do not anticipate this trend occurring in Riyadh, where the rate of price growth is expected to moderate.

On par with trends in its sales market, in Bahrain, we are expecting villa rents to increase marginally in 2023, whereas, over the same period, average rents are forecast to decrease further.

Dubai’s residential rents reached their highest level on record in 2022. Throughout this period, average apartment rents increased by 27.1%, and average villa rents rose by 24.9%. Demand has also increased significantly with the number of tenancy contracts registered increasing by 10.8% year-on-year, however, new registrations fell by 7.0%. In 2023, rents in Dubai will continue to increase uniformly, however we will not see this happen at the same pace.

Finally, in Abu Dhabi, in the villa segment of the market, we expect that the rate of growth is likely to remain positive, although will remain in the low single digits. In the apartments segment of the market, we are forecasting for positive rental growth to return over the course of the year, however, the growth rates will not be material.

CBRE - Middle East Real Estate 2023 Outlook-11
CBRE - Middle East Real Estate 2023 Outlook-12