Why a migration rebound could boost property growth in key Gulf cities

The Global Living 2021 Report, Part II released by real estate advisor Savills said the Gulf cities are the Middle East’s mobility leaders, each with net migration rates projected to exceed 8 percent over the next five years.

The report noted that the continued economic growth in the Middle East has allowed key markets such as the UAE, Saudi Arabia, and Kuwait to focus their efforts on improving their residential and commercial infrastructure, which has been greatly aided by government initiatives such as Dubai’s Vision 2040 and Abu Dhabi’s Vision 2030.

This has increased investor interest in the region. Furthermore, as restrictions have been lifted and daily consumer activity has resumed, the increased availability of retail and leisure activities, combined with the revival of live events, has increased mobility within the region, accelerating the growth of the real estate sector, it added.

Steven Morgan, CEO at Savills Middle East, said: “Demand for purpose-built, professionally managed residential space is expected to increase further as cities worldwide begin to recover from lockdowns and global net migration returns to pre-pandemic levels.

“The Middle East’s economy has recovered rapidly as a result of the accelerated vaccination drive, showcasing its resilience as a place of investment and residence. This has resulted in an increase in investments, thereby creating employment opportunities and stable incomes.

“Cities in the region such as Dubai, Abu Dhabi and Kuwait City have emerged as mobility leaders, each with net migration rates projected to exceed 8 percent over the next five years.”

Swapnil Pillai (pictured above), associate director, research at Savills Middle East, added: “Whilst capital values increased in the Middle East in 2021, the rental market remained stable, owing primarily to travel restrictions between key source markets.

“However, as travel restrictions continue to ease and economic activity accelerates, creating new job opportunities, the real estate sector is likely to see an acceleration in growth.”

According to Savills, climate change is another contributing factor that will continue to shape the sector in the coming years.

Embodied carbon accounts for 11 percent of total global carbon emissions, rising to 40 percent when operational carbon is included.

This indicates that sustainable construction methods, building standards, and redevelopment opportunities will become critical as new, more sustainable products are required to meet rising tenant demand, said Savills.