Saudi Arabia’s property market grows, thousands of new units in market
Residential sales prices in Riyadh surged by 10 per cent year-over-year
Dubai: The introduction of thousands of new residential units in Riyadh and Jeddah during the first half of the year didn’t slow the ongoing increase in property values and rental prices in Saudi Arabia.
From January to June, a total of 27,500 new units were added in the country’s two largest cities, bringing the residential stock to approximately 1.5 million units in Riyadh and 891,000 units in Jeddah, according to a report from real estate consultancy JLL.
Despite this influx, residential sales prices in Riyadh surged by 10 per cent year-over-year, while rents increased by 9 per cent. In Jeddah, prices rose by 5 per cent, with rents up 4 per cent in the same period.
An additional 16,000 units are expected to be delivered in both cities by the end of the year. However, the outlook for the residential construction sector has become more uncertain due to intensified competition for land, local capacity constraints, volatile costs linked to global economic conditions, and rising shipping expenses, among other challenges.
In Riyadh, the supply of office space also increased, with 52,000 square metres added in the first half of the year, bringing the total to 5.2 million square metres.
In the second half of the year, an additional 249,000 square metres of office space is anticipated in Riyadh, while Jeddah is set to receive 48,000 square metres, with no new supply recorded in the first half of 2024.