The property sector in the three largest economies in the Gulf region is forecast to perform well in the first half of this year due to high oil prices and robust GDP growth, according to a Kuwaiti think tank.

The real estate sector in Saudi Arabia, the world’s largest oil exporter, is predicted to record a “strong recovery” throughout the year due to elevated oil prices and a forecast of 4% GDP growth, as per a report published by Markaz.

The report noted projections by the International Energy Agency (IEA) revealing average oil prices are set to reach $93 this year, compared to estimates by the International Monetary Fund of $79.7 a barrel.

“We expect the real estate sector in Saudi Arabia to pick up in the first half of 2024… our optimism is based on an expected growth in non-oil activities, the boom in the hospitality sector and an increase in the Kingdom’s spending on infrastructure,” it said.

Elsewhere, in the UAE, the second largest Arab economy, GDP is forecast to increase by around 4% this year, compared to 3.4% in 2023, which will have a direct positive effect on real estate and other non-oil sectors, the Markaz report goes on to add.

The findings show the UAE’s property activities recorded solid growth in Q3 2023, adding: “The sector is expected to continue this positive trend in the first half of 2024 mainly in the hospitality, residential and office activities.”

The report continued: “As for Kuwait, our expectations are that the real estate sector will record positive stability, supported by several positive factors, including a projected 3.6% GDP growth… the sector will then pick up towards the end of 2024 after it remained largely stable through 2023.”