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Rising Home Prices Impact Saudi Property Transactions

 


In a recent assessment by JLL, escalating home prices in Saudi Arabia are yielding a concerning decline in property transactions across the nation. The Q2 report reveals that residential property sale prices have surged, particularly in Riyadh with a notable 7% gain, and Jeddah showing a commendable 5% increase. However, the ascending prices coupled with higher interest rates are beginning to dissuade potential buyers from entering the market.

Furthermore, the study highlights shifts in market demand within Riyadh and Jeddah's major real estate sectors. The report underscores a 2% drop in the total number of sale transactions for villas and apartments in Riyadh and a substantial 17% decrease in Jeddah over the first five months of 2023. This decline also manifests in the total value of property deals, with Riyadh experiencing a 4% decrease and Jeddah witnessing a significant 19% dip compared to the same period the previous year.

Despite the dwindling transaction numbers, a bright spot emerges in the form of increased hohomeownershipmong Saudi citizens, currently standing at 67%. The government's ambitious target is to achieve 70% home ownership by 2030. As part of its commitment to bolster the property sector, the Saudi Minister of Justice, Dr. Walid AlSamaani, has launched the Real Estate Market platform. This online resource is aimed at furnishing accurate and updated information about the real estate sector, streamlining property transactions, and offering various e-services for buyers and owners. It's anticipated that the platform will also prove beneficial for investors and portfolio managers.

READ MORE: Property Transactions Decline In Saudi Arabia Rising Prices

Additionally, the Ministry of Municipal and Rural Affairs and Housing has introduced a set of new penalties for various municipal violations. The penalties encompass trespassing on public property, stealing electricity from lighting poles, and price manipulation by establishments. These comprehensive regulatory adjustments aspire to cultivate a more conducive operating environment, particularly for small and medium enterprises (SMEs), within the realm of the real estate industry.

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