While the Middle East is projected to have a slow recovery from the pandemic, real estate has emerged as a primary driver.

1. Real Estate Looks Like a
Major Driver of Economic
Improvement in Middle
East

2.  The entire world experienced an economic setback as a result of
the COVID-19 pandemic.While the Middle East has begun
recovering and is getting stronger each day, its economic bounce
back has largely been slower than the global average.This is due
to the fact that some of the hardest hit sectors, such as aviation
and tourism, are integral to the economic health of the Middle
East.
 According to a report that was recently published by PwC, a major
advisory firm, real estate recovery in the Middle East is
accelerating and largely driving the economic growth of the entire
region. Despite a third wave of coronavirus in the spring,
momentum is building in the real estate sector that will drive the
overall recovery of the Middle Eastern economy.

3. The Predicted
Trajectory for
Economic
Recovery
 The pandemic continues to challenge a number of different
sectors in the Middle East, which is not surprising. COVID-19
caused the largest global recession sinceWorldWar II and the
Middle East had some of the deepest economic contractions
because of very sharp cuts in oil production. Lockdowns across the
globe essentially dropped the demand for oil overnight, which left
the Middle East without its primary source of revenue.
 Many of the non-oil sectors essential to the region were also
affected, including retail, tourism, travel, and wholesale trade. In
the region, these sectors were hit harder than the global average
because of lockdown measures and overall decline in demand
around the world.

4. The Predicted
Trajectory for
Economic
Recovery
 While the third wave of the pandemic in the spring caused some
setbacks, data demonstrated a strong growth in non-oil gross
domestic product. Saudi Arabia is the first country to release
economic data showing this sort of rebound and other markers
have confirmed an increase in consumption across the region.
 That said, the Middle East is expected to reach pre-pandemic
levels of output by the middle of 2022, which is behind the global
average of late 2021. Some countries, including the United Arab
Emirates and Iraq, are not expected to recover to pre-pandemic
levels until 2023. However, this slower growth makes sense for the
region and should not be a cause for concern.

5. Factors
Limiting
Economic
Recovery in
the Middle
East
 The major reason the Middle East is lagging behind the rest of the
world in terms of recovery is the slow growth of the oil industry.
The cuts made are being tapered gradually, so the oil sector is
behind the non-oil rebound.At the same time, oil demand has
been surpassing expectations, which means prices around the
world have surged.
 Because of this, the oil industry may increase production quotas
much faster than experts initially expected. If this happens, the
Middle East may return to pre-pandemic levels of economic
activity closer to the global average, but it depends on how oil
companies respond to increasing demand.This oil growth would
offset the continued losses from the tourism and aviation
industries.

6. Factors
Limiting
Economic
Recovery in
the Middle
East
 In Some countries in the Middle East were hit very hard by the
decrease in the tourism industry. For example, Lebanon’s visitors
fell to essentially zero and the sector contracted by 80 percent in
2020. Saudi Arabia, Qatar, Libya, and Kuwait were also hit by
declines in tourism, although to a lesser extent. According to the
WorldTravel andTourism Council, the overall sector fell by about
half over the course of 2020.
 Many Middle Eastern countries were also hit by declines in
aviation.Qatar and the United Arab Emirates in particular suffered
massive losses. Emirates Airlines had a $5.5 billion loss due to
COVID-19.QatarAirway retained the largest network of any
airline during the pandemic but still reduce weekly flights by more
than half.

7. The Real
EstateSector
as a Primary
Driver of
Recovery
 At the beginning of the pandemic, the real estate sector in the
Middle East also suffered. Because of lockdowns, property trading
became much more difficult. At the same time, demand fell across
the region. Now, many urban areas are experience a solid
rebound, including the United Arab Emirates and Qatar.
 With Dubai planning its Expo and Qatar set to host the World Cup,
both will likely continue to see massive gains in the real estate
sector. Saudi Arabia has also had a strong growth in real estate
sales, as has Kuwait. In the latter, a draft law for residential
mortgages has facilitated a significant amount of growth in the
real estate industry.

8. The Real
EstateSector
as a Primary
Driver of
Recovery
 In Dubai, real estate prices are now seeing the most sustained
increases since 2014, which has instilled a lot of confidence among
investors. Furthermore, the purchasing managers indices have
also signaled real estate expansion throughout the year.These
indices are reflective of private sector activity.
 As the real estate sector continues to pick up momentum, it will
play a more significant role in recovery throughout the region.
Real estate emerged as a significant driver of economic growth
outside of the oil industry in the Middle East prior to the pandemic
and will help certainly help the region’s recovery if oil companies
do not increase production.