Saudi Arabia’s housing market showcased remarkable vigor during the third quarter of 2023, with total transactions soaring to $12.23 billion (SR45.9 billion). This trend, revealed in a CBRE report, highlights the Saudi real estate sector’s strength against a backdrop of global economic fluctuations.
Market Overview:
CBRE’s report details a notable surge in apartment prices in Saudi Arabia’s capital, witnessing a 16.1% year-over-year increase, reaching SR4,780 per square meter. This growth reflects robust demand within the residential property sphere, particularly in urban areas. Alkhobar and Dammam also experienced upticks in apartment prices, albeit more modestly, with increases of 2.9% and 2.4% respectively. Contrarily, Jeddah’s average apartment prices declined by 9.5%.
Analysis by Taimur Khan, CBRE:
Taimur Khan, CBRE’s Middle East Research Head, highlights that except for Jeddah, major Saudi cities recorded year-on-year price ascensions across villa and apartment sectors for Q3 2023. Khan attributes these gains to a blend of high interest rates and buyers’ anticipatory attitudes, awaiting new, quality real estate projects.
Villa Market Dynamics:
The villa market in Riyadh, Dammam, and Alkhobar showed upward price movements in the year leading to Q3 2023. Riyadh’s average villa prices saw a 1.2% uplift, whereas Dammam and Alkhobar registered increases of 1.8% and 3.2%, respectively. Conversely, Jeddah’s villa prices witnessed a 3% downturn.
Transactional Trends and Mortgage Contracts:
Despite the buoyant pricing landscape, the total real estate transactions experienced a 7% dip from the same period in 2022. Corresponding to this, the overall value of residential property transactions fell by 11.3%. The report also underscores a substantial 37.5% slump in mortgage contracts up to Q3 2023, with single-family homes dominating the lending market, followed by apartments and land.
Saudi Arabia’s housing market during Q3 2023 demonstrates a nuanced interplay of economic strategies, buyer behavior, and market expectations for upcoming properties. While regions like Jeddah saw downturns, the general market resilience in major cities signals strong demand and investor confidence in the Saudi real estate landscape. The CBRE report offers crucial insights for stakeholders and investors navigating the dynamic Saudi housing market.
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