17- 19 RESIDENTIAL MARKET REPORT - Index Exhibition

17

                       DUBAI WORLD TRADE CENTRE
                 -
                19
                SEPT
                2019

RESIDENTIAL
MARKET REPORT

COMPILED BY:

Overview of the GCC Residential Sector
The GCC region has one of the fastest growing populations in the world, largely driven by an active influx
of expatriates. The GCC population size is projected to reach 62 mn by 2022 (Alpen Capital estimates). The
overall GCC residential sector projects expected to be completed is likely to be worth US$ 26,113 mn in
2019 (refer Figure 9). In the GCC, KSA and the UAE are the largest residential real estate markets, wherein
Dubai, Abu Dhabi, Riyadh, and Jeddah are the key residential hubs, which accommodate the largest
population in the GCC.

Figure 9: GCC Residential Sector Projects Expected to be Completed 2019 (US$ Million)

Source: Ventures ONSITE Project Intelligence Platform: www.venturesonsite.com

The GCC’s residential market is the biggest contributor to the demand for interiors and fit-out solutions,
wherein the expected interior and fit-out spend is likely to be worth US$ 2,872 mn in 2019. In 2019, the
UAE (US$ 1,361 mn) is likely to lead with interior and fit-out spend followed by KSA (US$ 820 mn) and
Qatar (US$ 317 mn) (refer Figure 10).

For 2019, Property Finder research has found 33,982 additional residential units that are under
construction in Dubai that have a completion status of at least 65% to date and is scheduled to be
completed in 2019. 29,115 of those units are apartments and 4,867 units are villas/townhouses, 2,296

units from Nshama in Town Square, 5,652 apartments, villas and townhouses from Emaar between the
areas of Arabian Ranches, Downtown Dubai, Dubai Creek, and Dubai Hills. According to Lynnette Abad,
Director of Research and Data at Property Finder, developments will be more holistic as developers are
embracing the master planned communities’ concept. While few of these newer launches have a
completion date post-2020, 2019 is expected to witness some developers following the trend when it
comes to creating spaces where people can live, work and entertain themselves. Co-working communities
and open area spaces are being integrated in more developments and will see some projects that are
providing all-inclusive affordable co-living spaces for junior, white-collar professionals, adds Lynnette
Abad. The UAE has already commenced its expansive affordable residential construction project to
accommodate over 385,000 expatriate workers in a bid to improve the living standards for expatriates.
Moreover, the regional governments’ initiatives are also helping to attract private investment for the
regional residential real estate market, further driving the number of units across the nations.

In KSA, recent government initiatives in support of the residential real estate sector include the white land
tax, new regulations for the use and listing of Real Estate Investment Trusts (REITs), an increase in the
loan-to-value ratio for first home ownership, and the launch of the Sakani programme for affordable
housing. In January 2019, KSA’s housing ministry launched the Sakani program – 2019, that includes
allocation of 200,000 housing products in major areas of the kingdom for beneficiaries of the Sakani
scheme. These products will comprise mortgage units, under-construction units, off-plan units (Wafi), and
plots of land allocated free of cost. The General Supervisor of Real Estate Development at the Ministry of
Housing, Mohammed bin Saud al-Ghazwani, announced the provision of 50,000 new housing units in
partnership with real estate developers during 2019. 45 projects, in partnership with real estate
developers, were launched providing more than 77,000 housing units which they plan to start delivering
during 2019, while work to implement more in different regions will begin. According to Statista, the
market size for smart homes in KSA will total US$ 658 mn by 2022. The large demand for housing in KSA
and the government’s focus to initiate private sector partnerships and stimulate foreign investment have
created an attractive environment for investment in this sector. A big cultural shift is happening with new
generations in KSA explains Amad Almsaodi, founder and CEO of online real estate search engine
Aqarmap. Younger consumers are currently evincing interest in living in residential communities that have
shared amenities and there is less focus on privacy, especially in the Eastern and Western region, but also
in some newer neighbourhoods in the central region. Therefore, developers are looking into building
residential gated and semi-gated communities to take advantage of this new shift in demographics and
demand (Example: The US$ 421 mn Al Rimal Gated Community project, which is expected to be completed
in March 2019).

According to Qatar’s 2019 budget, US$ 3 bn is allocated over 5 years to develop new housing for nationals.
Some 13,700 residential units will be supplied to Qatar market in 2019, according to ValuStrat. The market
is expected to show resilience backed by additional foreign investment opportunities introduced by the
government, robust public spending on construction and improvements in the non-hydrocarbon sector.

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Figure 10: GCC Residential Interiors and Fit-Out Spend by Country, 2019 (US$ Million)

Source: Ventures ONSITE Project Intelligence Platform: www.venturesonsite.com

Major Design Trends in the GCC Residential Sector
As a result of increasing real estate prices and a rise in apartment style houses in the GCC region,
residential units are getting more compact in size, creating a strong demand for modular kitchens that
provide an efficient management of space in small houses.

According to Ellington, the design-centric luxury lifestyle property developer, in Dubai, residential interiors
are becoming increasingly softer with more nature-inspired palettes that have different textures. There
are many wood-look porcelain tiles, matte velvet finish joinery, backsplashes and feature walls with
mosaic and carved forms that reflect the new look and feel of homes. Glossy finishes are slowly starting
to be replaced by a more humble and gentle interior look and feel, that brings warmth into the interior
finish of 2019. Traditional dark and heavy doors and joinery are being substituted for lighter-coloured,
more contemporary woods and paint finishes. The use of light palettes and wood colours that provide for
uninterrupted floor to ceiling block tones help to create a look and feel of expansive space in a typical
studio, apartment or villa. 2019 is likely to witness a mix of natural green hues, floral and forest textural
walls in residential interiors.

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In KSA, where demographics are experiencing a massive change, the consumer market is also shifting
when it comes to architecture and interior design. Currently, 70% of KSA’s population is under the age of
30, and it is only getting younger. As younger Saudis, many educated abroad, come of age, some of the
design trends are also reflecting change. According to Amina Ali, an architect and interior designer from
Riyadh who works on design projects throughout the GCC and Asia, in Riyadh, modern styles of interior
design have been more appreciated by home owners in 2019: from hidden lights in the ceiling to modern
furniture. Meanwhile in Jeddah, traditional styles of interior design are still popular, including traditional
Islamic patterns on ceilings and the use of gold as a popular choice of colour.

Major Projects in the GCC Residential Sector
The following table represents the list of top residential projects expected to be completed in 2019 across
the GCC.

Table 3: Major GCC Residential Projects Expected to be Completed in 2019 by Project Value (US$ Million)

                                        PROJECT NAME                              NET VALUE (US$     COUNTRY
                                                                                  MN)
 National Guard Family Compound (NGFC) in Thuwal                                  1,000              KSA
 Ajman Uptown - 1504 Villas in Al Helio 4                                         750                UAE
 Villamar at Bahrain Financial Harbor                                             700                Bahrain
 National Guard Family Compound (NGFC) - Central Spine                            500                KSA
 Abraj Quartier - AQ03, AQ04, AQ05 & AQ06                                         500                Qatar
 Yas Acres - Phase 1                                                              462                UAE
 National Guard Family Compound (NGFC) - Villas                                   453                KSA
 Ajyal Community of Excellence Project (ACEP) - Phase 3 & 4                       426                KSA
 Al Rimal Gated Community                                                         421                KSA
 RP Heights in Downtown Dubai - Plot No. 345-394                                  408                UAE
Source: Ventures ONSITE Project Intelligence Platform: www.venturesonsite.com

Conclusion
Over the next few years, the GCC region is likely to witness a significant rise in tourist arrivals and expats
due to global events such as Dubai Expo 2020 and the FIFA World Cup 2022, thereby creating a lucrative
market for residential interior design and fit-out firms. People living in the GCC are increasing their spend
on renovating their homes including investments in new furniture, kitchens, bathrooms and flooring; and
are investing on higher quality products. In Abu Dhabi and Dubai, there are expats from more than 170
nationalities, generating demand for all types of furniture and interior design and the demand for high-
end luxury furniture items has increased over the years.

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