Middle East Real Estate Market Outlook 2023
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- The average GDP growth across GCC countries in 2023 is set to reach 2.7%
- The rate of inflation is forecast to ease from 3.9% to 2.4%
- Oil prices are forecast to remain at elevated levels at $86/pb and production is expected to remain steady, providing significant fiscal buffers for the region to achieve its diversification targets
- Total value of real estate projects planned or underway in the GCC currently stands at $1.36 trillion
Both the hydrocarbon and non-hydrocarbon sectors have seen strong rates of recovery over the course of the last year, with economic growth in the GCC region noticeably outpacing the global average during 2022. Over this period, economic growth in GCC countries recorded an average growth rate of 6.3%.
As we move into 2023, GDP growth in GCC countries is expected to reach 2.7%. Headline growth rates have been revised down over the course of the last quarter of 2022; this has been primarily due to weaker growth expectations in the hydrocarbon sectors brought on by what is expected to be a weaker global economic backdrop in 2023. Although, the re-opening of the Chinese economy, a major trading partner for the region, may mean higher than expected growth within this sector. With regards to the non-hydrocarbon sectors, growth outlooks have remained relatively steadfast and, in some cases, have even been revised higher.
Inflationary pressures in GCC countries, which were relatively tame compared to the global average, are expected to dissipate, with the average rate of inflation expected to fall to 2.4% in 2023. For most countries, the projected rate of inflation in 2023 will now be in line with their historic average.