Number of residential transactions slip 10% and 8% in the two key Saudi Arabian cities
A decrease in average sale prices for villas and apartments in Riyadh and Jeddah saw residential transactions decline 10% and 8% respectively in the third quarter, reports JLL.
The real estate advisory firm noted that in Riyadh, the decline was primarily driven by more restrictive mortgage regulations issued in November 2014, and the seasonal nature of market activity during the Holy Month of Ramadan.
Rents in Riyadh however continued to rise across the board, as demand for rental property remained strong through the quarter.
The high-end residential market also continued to see activity, noted the report.
“Demand remains strong within the residential sector, particularly as high end residential properties and community developments, such as the Rafal and Damac projects, continue to be active and on track for scheduled completion in 2016 and 2017,” said Jamil Ghaznawi, National Director and Country Head of JLL in Saudi Arabia.
Similarly in Jeddah, average sale prices decreased across the board, with an 8% decrease in residential unit transactions registered by the Ministry of Justice in the third quarter, compared with the same time last year.
The city’s rental market however experienced a slight increase, with a year-on-year increase of 19.7% for apartments and 4.5% for villas.
Rentals are expected to increase modestly during the remainder of 2015, JLL said.
“The residential sector saw an increase in both apartment and villa rentals, as buying property remains a difficult option for middle income households. The Ministry of Housing, however, has plans to combat this shortage with the construction of around 15,000 additional units of affordable housing by 2017,” Ghaznawi said.