JLL: Riyadh property prices decline, rents pick up in Q2
New mortgage regulations in Saudi Arabia continue to negatively impact the sales market, consultancy says
Riyadh apartment prices fell by 1% and villa sale-values were down by 0.5% in the second quarter, according to a report by JLL.
New mortgage regulations continue to impact the number of transations in the Saudi sales market, but there was a slight uptick in rents in Riyadh during the period, the consultancy said.
“The new mortgage regulations continue to negatively impact the sales market with the volume of residential transactions decreasing by 7% for Q2 2015 vs 2014, according to the Ministry of Justice, as citizens struggle to find the 30% down payment required by lenders to be eligible for a mortgage,” a summary of the report said.
Jamil Ghaznawi, National Director and Country Head of JLL KSA, said the changes in prices had been minimal.
“There has been relatively little change in the real estate market in Riyadh in the second quarter of 2015 although recent changes to mortgage regulations have caused downward pressure in the residential sales market,” said Ghaznawi.
It is expected that the implementation of a tax on undeveloped land in Saudi Arabia will encourage the building of more residential units to meet the shortage of affordable housing in Riyadh, the report noted.
