The Gulf real estate markets are witnessing an impressive surge, with Dubai, Saudi Arabia, and Kuwait displaying notable sales growth. According to a recent report from Kuwait Financial Centre “Markaz,” the region is expected to maintain its upward trajectory well into the latter half of 2025. This remarkable performance highlights the resilience of the Gulf real estate markets, fueled by strong demand across various sectors and favorable economic conditions.
Markaz’s latest outlook indicates that robust interest in residential, commercial, and hospitality properties has driven both prices and transaction volumes higher during the first half of the year. With continued government investment and lower interest rates, the overall market momentum is poised to persist throughout 2025.
The report presents a positive outlook for the Gulf Cooperation Council (GCC) real estate sector, emphasizing that persistent investor interest and ongoing diversification initiatives continue to support market performance, even amidst fiscal pressures in specific areas.
Dubai Leads on Global Stage
The UAE’s real estate landscape has outperformed its GCC counterparts, with transaction values soaring to AED 239 billion ($65 billion) in the first quarter of 2025. Notably, Dubai accounted for AED 142 billion from a staggering 45,077 transactions, marking a remarkable 30 percent year-on-year increase.
Throughout 2024, Dubai shattered records with AED 761 billion in real estate sales—an increase of 20 percent compared to the previous year, driven by 226,000 transactions, a 36 percent jump. The influx of more than 110,000 new investors represents a staggering 55 percent growth, underscoring Dubai’s magnetic appeal.
Both Dubai and Abu Dhabi continue to outperform global rental yield averages, with Dubai achieving an impressive 7.6 percent in May 2025—far exceeding 5.3 percent in New York, 3.2 percent in Singapore, and 3.1 percent in London. Markaz predicts that strong demand, lower borrowing costs, and rising tourism will sustain support for residential, office, and hospitality segments throughout the remainder of the year, despite potential stabilization of rental rates due to new supply.
Saudi Arabia Sustains Momentum
In Saudi Arabia, the real estate market is accelerating, driven by the Kingdom’s ambitious diversification strategy. The property price index saw a year-on-year increase of 4.3 percent in the first quarter, while overall real estate sales surged by 37 percent during the same period.
Residential property prices experienced a 5.1 percent rise, while commercial values appreciated by 2.5 percent, reflecting the firm demand for commercial spaces in light of non-oil economic growth.
Despite expected fiscal challenges, including a forecasted widening of the fiscal deficit to 4.9 percent of GDP this year from 2.8 percent in 2024 due to diminishing oil revenues, Markaz asserts that Riyadh’s commitment to maintaining investment in diversification projects should continue to fortify the property sector.
Kuwait Sees Broad-Based Recovery
Kuwait’s real estate market is also demonstrating steady recovery signs as of the first quarter of 2025, characterized by rising land prices and rental values in investment and commercial segments alike.
Real estate sales hit KD 896 million ($2.9 billion) in Q1, reflecting a remarkable 45 percent increase from the previous year. Gains were widespread, with investment sales soaring 49 percent year-on-year, residential transactions up 38.5 percent, and commercial sales rising by 22.9 percent.
The total number of transactions increased by 20.9 percent overall, driven by commercial deals, which soared by an astonishing 163.6 percent. Growth in the expatriate population contributed significantly to a 29.7 percent rise in transactions within the investment segment.
Markaz forecasts that Kuwait’s real GDP will grow by 1.9 percent in 2025, reversing a previous contraction of 2.8 percent in 2024. It anticipates that heightened project activity, increased consumer spending, and favorable legislative reforms will further bolster demand within the commercial and industrial real estate sectors.
The Markaz Real Estate Macro Index for Kuwait, which stood at 3.25 out of 5.0 in the first half of this year, indicates stable market conditions with potential for additional growth.
The combination of macroeconomic indicators, along with sustained investor interest and ongoing government initiatives, positions the GCC real estate markets for continued expansion in the latter half of the year. While some fiscal challenges remain—particularly in Saudi Arabia—lower interest rates and ongoing diversification efforts, combined with strong demand, render the region’s real estate markets increasingly attractive for both investors and developers.