Residential Real Estate Trends in Saudi Arabia
Real Estate Market has grown rapidly since last year due to immense demand in the Kingdom of Saudi Arabia. This demand has gained momentum due to various initiatives taken by the Government of Saudi Arabia to boost the Housing Sector.
There have been a considerable increase in the residential prices over the past one year and the increment has been close to 6-7% overall as per a report from the Riyadh residential research Firm. The report suggests variable increment in Riyadh, the capital of the Kingdom. Prices remain to be stagnant especially in the South of the Capital due to congestion issues, however north witnessed a lot of development activity which resulted in an increment of whopping 9%. Experts believe that the trend is likely to continue as the new supply is unlikely to fulfill the offset pent up demand.
Saudi Arabia has been witnessing tremendous growth since the past 11-12 years and according to latest report from Saudi Arabian Monetary Agency the growth has been at an alarming pace of approximately 10% every single year. Riyadh, being the capital city of Saudi Arabia, saw the most growth and accounted for an average around 25% growth on all residential and commercial markets. The number of Residential and commercial permits issued in the last 10 years has gone up by more than 200% with Riyadh being the most with a whopping 300% and more. In spite of this tremendous growth, the report suggests that the demand for residential units will continue to outstrip the supply in Riyadh in the coming years. There are a large number of housing schemes to be completed in the short term however this would still be not enough to meet the current levels of pent up demand.
According to the figures of a recognized Statistics & information center, only 60% of all the housing units in the Kingdom of Saudi Arabia are occupied by the owner. In fact it drops further in Riyadh to around 50%. There are interesting figures which comes out from the neighboring countries. The percentage of owner occupation is much higher in the other gulf countries with Oman topping the list with a high of 83%, UAE at 75%, Qatar at 82% and Bahrain with an owner occupancy percentage of 82%.
The government of Saudi Arabia is taking a lot of initiatives to boost the Housing Sector. The planned metro will help the cause immensely. Areas which suffer immensely because of congestion are seen as less desirable and have not witnessed development over years. These areas are likely to benefit a lot as the planned metro will certainly ease out the congestion and will surely offer new development opportunities.
The population in Saudi Arabia continues to grow at a rapid pace and in particular of all, Riyadh continues to see the maximum growth in its population. The trend is going to continue in the coming years and so the residential prices will continue to increase in the times ahead. The government initiatives and the entry of new International Developers in the Real Estate will certainly boost the construction activity and so the Real Estate Sector will continue to grow in the coming years.