meed-logo

line1 line2 line3
SIGN IN / REGISTER

GCC real estate faces a more nuanced reality

3 July 2025

 

The GCC real estate market in 2025-26 is characterised by dynamic growth, largely propelled by ambitious government-led diversification strategies and large-scale masterplanned projects. 

Robust sales and significant development pipelines have been interpreted as indomitable market fundamentals across the region, particularly in Saudi Arabia and the UAE. 

This year, a more balanced perspective has emerged that reveals new challenges as markets cope with external threats including a weakening global economy and regional geopolitical tensions, combined with domestic challenges such as oversupply and affordability. 

Concerns about potential oversupply in certain residential and retail segments, especially in Dubai and Riyadh, are notable, with ratings agencies such as Fitch forecasting price corrections. 

With so many real estate projects planned in the GCC region, the construction sector is poised for continued expansion, yet concerns are growing over delivery as capacity is constrained and contractors are becoming increasingly risk averse as their orderbooks fill.   

Balancing population growth with project pipelines and the delivery of national visions will be critical in shaping the market’s performance in the future. 

Investors and developers will need to navigate these complexities if they are to continue enjoying the success they have achieved in the past four years.

Bahrain

Bahrain’s real estate sector performed steadily in 2024, led by the residential market, which benefitted from demographic growth, improved affordability and supportive government initiatives.

Updated immigration policies such as the introduction of a Golden Visa programme have encouraged more expatriates to purchase properties, which has been stimulating demand. 

The price of high-end apartments increased modestly year-on-year, with an increase of 1.4% in 2024, while villa prices remained stable, indicating strengthening demand for premium properties with modern amenities, according to real estate services company Savills. 

There was an even greater increase in rental values, which rose by 23% across Bahrain in 2024, with the Capital Governorate accounting for 48% of rental transactions, Savills says. 

The country’s commercial office market faced challenges in 2024, however, with limited demand and relatively flat rental growth, despite new developments such as SayaCorp Tower entering the market, Savills reports. 

Conversely, Bahrain’s retail sector showed signs of recovery last year, driven by luxury brands opening new stores in Marassi Galleria, increasing foot traffic and demand.

For industrial space, larger warehouses saw a slight increase in rental rates, with a 2.1% year-on-year growth, while rates for smaller units remained stable, Savills says. This sector remains integral to Bahrain’s economic diversification strategy, with further infrastructure investments expected to support demand.

Kuwait 

Kuwait’s residential prices have softened over the past year. Overall residential sales in the first quarter of 2025 declined by 24% quarter-on-quarter, marking the weakest growth since Q2 2024, but only dipped by 2% year-on-year despite an 11.7% rise in transactions, potentially indicating a shift towards smaller or lower-value units in outer areas, according to National Bank of Kuwait (NBK). 

The residential price index remained negative, falling by 1.7% year-on-year in its eighth consecutive quarterly decline, although at a slower pace, suggesting abatement of downward pressure, NBK says.

The slowdown in residential sales in Q1 2025 indicates potential market sensitivity to seasonal factors and a normalisation from strong previous levels. 

The fiscal deficit for 2025 is expected to be -4.2% of GDP, up from -3.1% in 2024 on the back of declining oil revenue due to lower prices. 

Fiscal pressures could impact government spending on projects if oil prices remain low or decline even further.

Oman

Oman’s real estate sector is experiencing steady growth, supported by the country’s broader economic expansion. 

The residential market has registered a 3.6% increase in supply, adding about 38,400 new units in 2024. 

Despite the increase, occupancy rates remained stable at 85.2%, with villas and houses experiencing higher demand. The growth in residential supply is essential to meet the projected housing demand gap by 2035, which underscores the need for proactive planning to avoid potential shortfalls.

Oman’s tourism sector has also contributed positively to the real estate market, with guest arrivals at three- to five-star hotels up 3.6%, leading to a 6.1% rise in revenue. Hotel occupancy rates improved to 53.5%, indicating a gradual recovery in demand.

Looking ahead, Oman’s real estate sector is expected to benefit from government initiatives under Vision 2040, which aims to attract investment and foster economic diversification. Anticipated population and workforce growth will drive demand for housing and commercial properties. 

Challenges such as market dynamics and potential delays in project completions will require careful management. Overall, the outlook for Oman’s real estate sector remains stable, with opportunities for strong growth in both residential and tourism-
related developments.

Qatar

Qatar’s real estate market has continued to adapt to evolving demand patterns and macroeconomic conditions, according to real estate consultancy Knight Frank. While some sectors showed resilience, overall trends point to a period of moderation across the residential, commercial and retail segments.

In the residential sales market, average villa and apartment prices declined by 5% year-on-year. Despite the fall, demand for homes in locations such as Pearl Island and West Bay Lagoon remains stable. Abu Hamour recorded the highest average villa sale price at QR8,587 ($2,359) a square metre (sq m), while the Waterfront led the apartment segment at QR14,300/sq m. 

Mortgage activity rose sharply, with a 168% year-on-year increase in Q4 2024, partly attributed to declining interest rates.

Rental rates in the villa segment dropped by 2.6% in 2024, averaging QR15,875 a month, although premium areas such as West Bay Lagoon continued to command higher rents. The apartment rental market remained relatively stable, with luxury developments such as Pearl Island seeing sustained demand and rents for three-bed properties averaging QR15,721 a month.

In the office market, Grade A rents dipped by 2.3%, settling at QR90/sq m. Prime areas like West Bay and Marina District remain in demand, although vacancy rates in secondary locations are contributing to downward rental pressure.

Retail rents declined by 1.5% amid increasing supply and shifting consumer behaviour. Lifestyle and experiential retail developments outperformed, while secondary malls faced growing competition. 

E-commerce also continued to gain ground, with online sales surging 32% year-on-year in December 2024.

The outlook for Qatar’s real estate market will depend on the pace of economic diversification … and broader regional stability

Qatar’s hospitality sector saw marked improvements, supported by a 25% rise in tourist arrivals in 2024. Key performance indicators, including occupancy rates and revenue per available room, recorded double-digit growth, reflecting the country’s appeal as a leisure and business destination.

The outlook for Qatar’s real estate market will depend on the pace of economic diversification, infrastructure investment and broader regional stability. While high-end residential and hospitality sectors appear well positioned, other segments may find the outlook more challenging.

Saudi Arabia

Saudi Arabia’s real estate market has displayed a mixed performance across all sectors, with momentum in residential and tourism-led hospitality markets counterbalanced by slower activity in the office and retail segments, according to real estate agency CBRE’s latest market review.

In Riyadh, residential sales remained resilient, underpinned by population growth, ongoing reforms and increased demand from Saudi nationals and expatriates. Despite high mortgage rates, key developments such as Diriyah and King Salman Park continue to attract investor attention. 

Demand in Jeddah is more subdued, with price growth stabilising after recent surges. Supply constraints and the government’s focus on increasing home ownership to 70% by 2030 remain influential drivers.

The hospitality sector showed significant growth, particularly in the religious and leisure tourism segments. Strong visitor numbers to Mecca and Madina supported high hotel occupancy rates, while developments in Al-Ula and the Red Sea contributed to the expansion of the kingdom’s tourism offering. 

Saudi Arabia recorded a surge in international tourist arrivals, reflecting its broader push to diversify the economy through the Vision 2030 strategy. Major global hotel brands continued to announce new projects, signalling long-term confidence in the sector’s prospects.

The office market remained relatively stable, although demand patterns are evolving. In Riyadh, Grade A office spaces remained in demand amid limited supply, while older or lower-grade buildings experienced elevated vacancy levels. 

In Jeddah and Dammam, activity was more modest, with tenants preferring flexible leasing arrangements. CBRE notes that public sector activity and government-backed gigaprojects continue to play a significant role in driving office demand.

Retail sector performance varied, with experiential and lifestyle-focused retail formats gaining traction, while traditional malls faced ongoing pressure from e-commerce growth and shifting consumer behaviours. Developments in Riyadh and Jeddah reflect a broader industry shift towards mixed-use destinations with entertainment and leisure at the core.

Looking ahead, Saudi Arabia’s real estate outlook remains cautiously optimistic. Continued progress on gigaprojects such as Neom, Qiddiya and the Red Sea developments are expected to support long-term demand across several asset classes. 

However, affordability challenges, financing constraints and evolving global economic conditions could temper short-term momentum.

 UAE

After four strong years, Dubai’s residential market has shown signs of plateauing in 2025. 

The market recorded more than 42,000 sales transactions in the first quarter of this year, reflecting a 10% quarterly decline due to fewer new project launches and seasonal factors, according to property consultant Cavendish Maxwell. 

At the same time, year-on-year performance remained strong, with transaction volumes rising by 23.1% and total sales value reaching AED114.4bn ($31bn), a 29.6% increase. 

Residential rents increased by 1% quarter-on-quarter and 14.4% year-on-year in Q1 2025, marking the slowest quarterly rise in two years. Gross rental yields averaged 7.3% for apartments and 5% for villas and townhouses in March 2025.

In May, Fitch Ratings forecast a residential price correction in Dubai, starting in H2 2025 into 2026, driven by a record increase in new supply. This is a direct cause-and-effect relationship, where past sales, leading to new projects, are now translating into future supply, which will likely dampen price growth.

Fitch Ratings forecasts a residential price correction in Dubai starting in H2 2025 into 2026, driven by a record increase in new supply

Residential prices surged approximately 60% between 2022 and Q1 2025. Simultaneously, a record number of new property projects were initiated in 2023-24, with a peak delivery of 120,000 units expected
in 2026. 

Fitch says that this average 16% increase in supply in 2025-27 will exceed the forecast population growth of about 5%. This imbalance is the direct cause of the predicted 15% fall in residential property prices.

Rental yields are already showing pressure. While a correction is anticipated, Fitch also notes that UAE banks and developers are well-equipped to handle the downturn due to improved leverage and capital buffers. This suggests that the market is maturing, and stakeholders have learnt from previous cycles, potentially leading to a moderate correction rather than a significant crash.

https://image.digitalinsightresearch.in/uploads/NewsArticle/14187809/main.gif
Colin Foreman

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Firms submit Jebel Ali sewage PPP prequalifications

    24 July 2026

     

    Dubai Municipality received statements of qualification on 23 July from firms interested in delivering phase three of the Jebel Ali sewage treatment plant (STP) expansion project.

    Known as DS150/3, the project will be delivered under a public-private partnership (PPP) model on a design, build, finance, own, operate and transfer basis.

    The project involves the development of a new water resource recovery facility with an ultimate treatment capacity of up to 1 million cubic metres a day (cm/d).

    It is being procured through Dubai Municipality’s sewerage and recycled water projects department and will be delivered via a two-stage operational approach over a 30-year concession period.

    It is understood that the following firms are among those likely to qualify for the project:

    • Acciona (Spain)
    • Alkhorayef (Saudi Arabia)
    • Besix (Belgium)
    • Etihad WE (UAE)
    • GS Inima (Spain)
    • Metito (UAE)
    • Miahona (Saudi Arabia) 
    • Samsung E&A (South Korea)
    • Saur (France)
    • Suez (France)
    • Taqa Water Solutions (UAE)
    • Veolia (France)

    The municipality issued a request for qualifications notice in May with an intial bid submission deadline of 18 June. UK-headquartered Deloitte is acting as financial adviser, Aecom is the project's technical adviser and CMS is the legal adviser.

    Dubai Municipality said the project will also include additional land uses and community-focused amenities as part of broader sustainability and urban integration objectives.

    Phase one and two expansion

    On 9 July, firms submitted bids for an engineering, procurement and construction contract covering the expansion of the Jebel Ali STP phases one and two.

    Located on a 670-hectare site in Jebel Ali, the original wastewater facility has a treatment capacity of about 675,000 cm/d, following the completion of phase two in 2019, combining approximately 300,000 cm/d from phase one and 375,000 cm/d from phase two.

    The upgraded facility will be capable of treating an additional sewage flow of 100,000 cm/d, with the expansion estimated to cost $300m.

    UK-headquartered KPMG and UAE-based Tribe Infrastructure are serving as financial advisers on the project.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17735401/main.jpg
    Mark Dowdall
  • Contractors submit interest for Riyadh Expo substructure

    24 July 2026

     

    Contractors have submitted expressions of interest on 23 July for a contract to deliver the early works and substructure works for several assets at the Expo 2030 Riyadh site.

    Expo 2030 Riyadh Company (ERC) is tasked with delivering the Expo 2030 Riyadh venue. Saudi sovereign wealth vehicle, the Public Investment Fund, launched ERC – a wholly owned subsidiary – in June 2025 to build and operate facilities for the event.

    The assets include the Icon; the convention centre; and thematic pavilions, including the Culture of Wisdom, Place & Planet and Adaptation & Innovation pavilions.

    The Icon will be located at the entrance of the Expo 2030 Riyadh site, within the Collaboration Precinct.

    The structure will be connected to the metro station and will serve as a gateway to the event.

    It will be 66 metres tall and will comprise an observation platform, food and beverage (F&B) outlets and other features.

    The convention centre will cover about 22,000 square metres. It will be the first point of arrival for visitors to the expo.

    The Culture of Wisdom pavilion will be a 25-metre-tall building that will feature exhibition galleries, innovation laboratories and conference and learning spaces.

    The Place & Planet building will also be 25 metres tall, and will include indoor and outdoor exhibition spaces, F&B and retail facilities and support areas.

    The Adaptation & Innovation pavilion will be located within the Loop of Nations precinct and will comprise a 29-metre-tall building.

    Construction progress

    The tendering of the pavilion structures followed progress on the site’s infrastructure development works.

    In April, ERC awarded two contracts for the next phase of infrastructure works at the site to local firm Al-Yamama Company.

    The scope covered the construction of road networks and infrastructure for water, sewage, electricity, telecommunications and electric vehicle charging.

    These awards followed ERC’s January award of an estimated SR1bn ($267m) contract for initial infrastructure works at the site to local firm Nesma & Partners. That scope covered about 50 kilometres of integrated infrastructure networks, including internal roads and essential utilities such as water, sewage, electrical and communications systems, and electric vehicle charging stations.

    The overall infrastructure works – covering the construction of main utilities and civil works at Expo 2030 Riyadh – are split into three packages:

    • Lot 1 covers the main utilities corridor;
    • Lot 2 includes the northern cluster of the Nature Corridor;
    • Lot 3 comprises the southern cluster of the Nature Corridor. 

    The masterplan encompasses an area of 6 square kilometres, making it one of the largest sites ever designated for a World Expo event. Situated to the north of the Saudi capital, the site will be located near the future King Salman International airport and will provide direct access to landmarks within Riyadh.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739044/main.jpg
    Yasir Iqbal
  • Oil price rises above $100 a barrel after Red Sea attacks

    24 July 2026

    Oil prices rose to their highest level in nearly two months on 23 July after the latest escalation in the US-Iran conflict threatened severe new disruptions to global energy supplies.

    Global benchmark Brent crude closed 7% higher, at $100.69 a barrel on 23 July. Earlier in the trading day, it rose as high as $102 a barrel. That is its highest level in eight weeks, since the end of May.

    Brent was trading at over $100 a barrel in the early hours of 24 July, but later pared gains to settle around $99.63 a barrel as of 11am Gulf Standard Time (GST).

    The surge in the Brent price came after Iran-backed Houthi rebels claimed attacks on two Saudi oil tankers in the Red Sea following their announcement of a naval blockade on Saudi Arabia.

    It appeared to be the first time since the regional war began that attacks on oil tankers and other commercial ships had extended beyond the Strait of Hormuz, opening up a new front in the volatile conflict.

    The Houthi threat is unsettling to oil markets because millions of barrels a day pass through the Bab El-Mandeb Strait to reach global markets.

    ALSO READ: Opec+ holds the line on unwinding of production cuts

    About 12%-15% of global maritime trade, worth more than $1tn, transits the waterway every year.

    It has also served as an alternative to the Strait of Hormuz, where traffic remains largely at a standstill, with ship crossings falling to single digits on 21 July.

    Since the start of July, oil prices have risen about 35%. Those prices are more than 60% higher than at the start of the year. This has erased much of the progress made in bringing prices down after the US and Iran signed a memorandum of understanding in mid-June.

    The interim peace deal has now collapsed, with US President Donald Trump threatening on 22 July to blow up an Iranian bridge or power plant for every vessel Tehran attacks.

    This was followed by the Houthi claim to have hit two tankers in the Red Sea.

    The UK’s Maritime Trade Office reported a tanker “struck by an unknown projectile” north of the Bab El-Mandeb Strait, and state-run Saudi Press Agency (Spa) reported that a vessel named Encelia was set ablaze by an attack while it was sailing overnight in the Red Sea, citing an unidentified source from the General Authority of Transport. Spa did not mention the other vessel, which is understood to be called Layla.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17739553/main4051.jpg
    Indrajit Sen
  • Qiddiya tenders Dragon Ball theme park package

    24 July 2026

     

    Qiddiya Investment Company (QIC) has tendered a contract to undertake the back-of-house works on the Dragon Ball theme park in Qiddiya, Saudi Arabia.

    The scope covers the construction of plant rooms, facilities management buildings, workshops, storage warehouses and central processing kitchens.

    It also includes a monorail service depot, a fire station, parking, utilities and other associated infrastructure.

    The bid submission deadline is 13 September.

    The Dragon Ball theme park will cover more than 500,000 square metres and will have seven themed zones inspired by the Japanese media franchise, including Kame House, Capsule Corporation and Beerus’ Planet.

    The park will offer more than 30 rides with five main attractions, including a rollercoaster that passes through a 70-metre landmark based on the series’ wish-granting dragon Shenron. 

    The development will also include themed hotels.

    In September 2024, US-based firm Falcon’s Creative Group announced that it is undertaking the masterplan and attraction design and is the creative lead for the theme park.

    QIC formally launched the Dragon Ball theme park in March 2024.

    The announcement came after QIC signed an agreement with Japanese firm Toei Animation, the producer of the Dragon Ball anime series.

    The Dragon Ball theme park is one of several major projects within the wider Qiddiya development. Other projects include an e-games arena, Prince Mohammed Bin Salman Stadium, a horse racing venue, a performing arts centre, the Speed Park and Six Flags theme parks and Aquarabia waterpark.

    The project is a key part of Riyadh’s strategy to boost leisure tourism in the kingdom. According to UK analytics firm GlobalData, leisure tourism in Saudi Arabia has experienced significant growth in recent years.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17738622/main.jpg
    Yasir Iqbal
  • Saudi Arabia appoints developer for hybrid power plant

    24 July 2026

     

    Saudi Arabia-based Lamar Holding has signed a contract to develop a hybrid power plant at the Empty Quarter (Rub Al-Khali) land port in Saudi Arabia, according to a source.

    The public-private partnership (PPP) project aims to reduce diesel fuel use with renewable energy and ensure a long-term power supply at the Empty Quarter land port. It includes the construction of 15MW of total hybrid installed capacity, installation of a 7 megawatt-peak solar photovoltaic system and eight 1MW internal combustion engines.

    In March, MEED exclusively reported that Lamar had been given preferred bidder status and was in advanced discussions with Saudi Arabia’s Zakat, Tax & Customs Authority (Zatca) for the contract.

    MEED understands that the proposed plant will have the capacity to produce 25 gigawatt-hours of electricity annually. It will be implemented under a design, build, finance, operate, maintain and transfer contract model for 25 years, excluding the construction period.

    US/India-based Synergy Consulting is acting as financial advisor to Lamar on the project. Egyptian firm Eternal Consultation Engineering Services is acting as the technical support consultant and Dubai-headquartered Aktech is the technical consultant for the project.

    Lamar Holding and Dubai’s SirajPower submitted bids for the Empty Quarter hybrid power plant project in July 2025, as previously reported by MEED.

    Zatca, in collaboration with the National Centre for Privatisation & PPP, had previously prequalified the following four companies to bid for the contract in October 2024:

    • Alfanar Company (Saudi Arabia)
    • Lamar Holding (Saudi Arabia)
    • Olayan Energy (Saudi Arabia) / Enerwhere Sustainable Energy (UAE)
    • Siraj Power for Renewable Energy (UAE)

    Prior to that, in July 2024, 12 Saudi companies and local branches of international companies, along with 11 overseas-based companies, submitted statements of qualifications for the contract.

    In addition to building and operating the power plant, the project scope includes ensuring the facility operates to defined requirements and output specifications. It also involves managing power generation and the connection to the Zatca interface point for the entire project term.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17733327/main.jpg
    Mark Dowdall