KUWAIT CITY — Real estate sale transactions in the GCC for the first half (H1) of 2023 reached $90.7 billion, up 9.9 percent year-over-year from $82.5 billion in the H1-2022, according to the latest report by Kamco Invest. Dubai’s transactions contributed 54 percent of the region’s total value, offsetting declines in other key markets like Saudi Arabia, Qatar, and Kuwait.
Real estate value transacted in Dubai increased almost 57 percent year-over-year in H1-2023, based on data from DXB Interact. Key drivers included strong pricing and demand for luxury properties for both single-family and multi-family homes, while the affordable property segment also saw healthy gains.
Kamco expects the pace of price and rental growth across residential key markets to moderate further in H2-2023, as late-cycle stabilization occurs and supply calibrates to more normalized demand. The trajectory of mortgage rates and rental affordability should impact end-user ownership trends, especially in markets like the UAE and Saudi Arabia, in our view.
Despite global macroeconomic headwinds, the UAE’s property market performed well across all sectors in the first half of the year, thanks to robust growth in its non-oil economy. Dubai’s recorded sales exceeded $48.2 billion in the first half of 2023, including over 60,440 transactions, representing a 46.71 percent increase in the residential property market and a 30 percent increase in the commercial sector.
Deyaar Development PJSC, one of Dubai’s leading real estate developers, announced positive financial results for H1-2023 compared to the same period in 2022. The company showed substantial growth, with a 77 percent increase in profits reaching $32.2 million compared to $18.2 million during the same period in 2022. Net profit in Q2-2023 increased by $8 million (90 percent) to reach $16.9 million from $8.9 million in Q2-2022. Revenue increased by 70 percent to reach $171.2 million compared to $100.5 million in H1-2022.
On the other hand, Emaar Properties, Dubai’s largest listed developer, reported a 15 percent surge in its first-half profit amid higher property sales. Net profit for the six months to the end of June climbed to $1.3 billion. Emaar achieved first-half group property sales of $5.4 billion, a 14 percent annual growth. However, revenue for the period dropped 10 percent to $3.3 billion, while other income rose 89 percent to $250 million.
Rising house prices in Saudi Arabia and a limited supply of favorable properties led to a 32 percent decline in real estate transactions during the first half of 2023, according to Knight Frank. Saudi Arabia has over 600,000 residential units under development, with Riyadh accounting for 18 percent of the total. The value of these projects is estimated to be $229 billion; this includes plans to build over 241,000 homes by 2030.
According to Kamco Invest, residential rents in Riyadh and Jeddah echoed the drive toward affordability as apartment rents grew by 4 percent and 13 percent year-over-year, respectively, in Q1-2023, outpacing overall residential rental increases by 200-400 basis points over the same period.
Jabal Omar Development Company reported 78.17 percent lower net losses after Zakat and tax to $18.1 million in H1-2023 compared to $82.9 million in H1-2022. The company achieved revenue worth $205.7 million in H1-2023, an annual surge of 97.18 percent from $104.3 million. During Q2-2023, Jabal Omar recorded a 37.92 percent year-on-year decline in net loss to $21.2 million from $34.2 million. Revenues jumped by 61.36 percent to $121.1 million in April-June 2023 from $75 million in Q2-2022.
On a quarterly basis, the company turned to net losses in Q2-2023 against net profits worth $3.1 million in Q1-2023, while the revenues grew by 43.32 percent from $84.5 million. The accumulated losses, meanwhile, reached $18.1 million as of June 30, 2023. It’s noteworthy to mention that in H1-2022, the accumulated losses of Jabal Omar stood at $397 million, which represented 16 percent of the $2.4 billion capital as of June 30, 2022.
Taiba Investments Company logged net profits after Zakat and tax valued at $23.8 million in H1-2023, an annual surge of 63.44 percent from $14.6 million. In the six-month period that ended on June 30, 2023, revenues soared by 81.01 percent year-on-year to $64.5 million from $35.6 million. The firm posted 20.09 percent year-on-year lower net profits after Zakat and tax at $7.3 million in Q2-2023, versus $9.1 million. Revenues totaled $34.9 million in April-June 2023, marking a 61.61 percent hike from $21.6 million a year earlier. On a quarterly basis, the Q2-2023 net profits plummeted by 55.59 percent from $16.5 million in Q1-2023, while the revenues jumped by 18.22 percent from $29.5 million.