Staff Report,
Dubai, UAE
Saudi Arabia recorded a 16 percent drop in its residential transaction volume from 175,067 in 2022 to 150,000 in 2023. Based on Coldwell Banker Richard Ellis’ (CBRE) latest report, key cities like Riyadh and Jeddah made up bulk of the volume in the final quarter of 2023, jumping by 63.7 percent and 23.4 percent respectively. According to Kamco Invest, Riyadh’s growth is attributed to the increasing number of regional businesses that led to a rise in demand for residential units. On the other hand, Dammam witnessed a decline of 23.4 percent in the year to Q4 2023. On the GCC level, Saudi Arabia contributed around US$40 billion (Dh146.91 billion) worth of transactions to the region’s total performance of US$171.6 billion (Dh630.26 billion) in the first ten months of 2023.
CBRE noted that average apartment prices grew in Riyadh, Dammam, and Khobar, while prices in the capital decreased in the year to Q4 2023. Villa prices, however, maintained uniform growth across the main cities. An inflationary increase of 1.5 percent has led to rental inflation in the year to December 2023. Apartment and villa rents grew by 12.1 percent and 6.7 percent respectively. Consequently, the growing affordability concerns in Saudi residential markets can negatively impact the sales trend, as per Kamco Invest.
On the country’s real estate forecast for 2024, Taimur Khan, Head of Research – MENA at CBRE, said, “In 2024, whilst supply across many sectors is set to expand, we expect that it will still continue to lag demand materially, as a result we expect that performance levels will remain robust throughout the year.”
The real estate sector is projected to underpin Saudi Arabia’s non-oil Gross Domestic Product (GDP) growth by 3.6 percent in 2024, which will drive the total GDP to 5 percent this year following 1.2 percent decline in 2023.
Ends
Also read: Saudi Arabia’s office market fuels economic growth in Q4 2023
