Saudi Arabia set to see continued growth of its residential real estate market

Saudi Arabia has seen its residential property market expand rapidly over the last year due to increased demand caused by various government initiatives to boost the housing sector.
Over the past year, residential prices in Riyadh have risen by 5% to 7% overall, according to the Riyadh residential research report from international real estate firm Knight Frank.

However, it points out that there have been variable performances across the capital’s districts, with congestion issues in the south, for example, responsible for prices stagnating.

In recent years, Saudi Arabia’s residential construction sector has been expanding rapidly. Indeed, the latest available data from the Saudi Arabian Monetary Agency shows that the value of residential building construction across the kingdom rose for the ninth consecutive year in 2012, increasing by 11.4% year on year.

Riyadh is an important driver of construction activity in Saudi Arabia and the capital city accounted for an average of 27% of all residential and commercial permits issued across the
Kingdom between 2003 and 2013.

Over the next couple of years, we expect residential prices to continue to rise in Riyadh as the city’s rising population exacerbates the already acute housing shortage. Beyond that period, improving infrastructure, as well as new international developers entering the market, should boost construction activity and thus housing completions,’ the report concludes.