REAL ESTATE

SAUDI PROPERTY MARKET MAINTAINS ITS UPWARD TRAJECTORY

Real estate prices in Saudi Arabia edged up higher last year, rising 2.6% in the fourth quarter on the back of robust economic activity and expansion of key sectors.

Prices of residential plots climbed 2.7% on an annual basis in the fourth quarter of 2022, while prices of villas rose 1.7%, and apartments by 2.2%. On the other hand, house prices declined 0.4%, while residential building prices were stable and did not post any relative change, according to latest ocial data from the General Authority of Statistics (GASTAT).

Real estate prices in the commercial sector eased 0.2%, aected by the decrease in the prices of commercial plots of land, which contracted 0.2%. Commercial centre prices rose 0.1%, while agricultural sector decreased by 0.8%.

The performance has continued to improve in the first quarter of 2023, with residential real estate prices in Riyadh rising 7% year on year in the first quarter, and average rents rising 2% during the period. Jeddah, meanwhile, saw sale prices soar 11% during the first quarter and rents rise 9%.

“Riyadh witnessed the completion of close to 7,800 residential units in Q1 2023, pushing up the total stock to 1.4 million residential units. Over the same period, 4,400 units were handed over in Jeddah to bring the city’s residential inventory to 864,000 units. In the remaining months of this year, 45,000 units are planned to be delivered across the two cities combined,” according to Jones Lang LaSalle, a research consultancy.

The introduction of several new measures to boost home ownership among Saudis will also benefit the residential sector. Demand has been rising and expected to continue to trend higher amid rising population and a growing desire among Saudis to move into villas and apartments.The government has allocated 100 million square metres of land to the residential sector in the capital and other cities to control the increase in land and residential prices.

 

NEW MURABBA

The sentiment has also been buoyed by the launch of a number of high profile projects such as the first phase of Al Arous in Jeddah, as well as Al Fursan and the second phase of Khuzum in the capital city of Riyadh. Another major announcement was the launch of New Murabba in Riyadh, which aims to be one of the world’s largest downtowns.

Built around the concept of sustainability, New Murabba will feature green areas, and walking and cycling paths to promote healthy, active lifestyles, and community activities. It will also feature a museum, a technology and design university, a multipurpose immersive theatre, and more than 80 entertainment and culture venues.

“The project will be situated at the intersection of King Salman and King Khalid roads to the North West of Riyadh, over an area of 19 square kilometres, to accommodate hundreds of thousands of residents,” according to the Public Investment Fund (PIF), which is developing the New Murabba. “The project will oer more than 25 million sq m of floor area, featuring more than 104,000 residential units, 9,000 hotel rooms, and more than 980,000 sq m of retail space, as well as 1.4 million sq m of oce space, 620,000 sq m of leisure assets, and 1.8 million sq m of space dedicated to community facilities.”

PIF unit New Murabba Development Company (NMDC) will develop the project and build the cubic-shaped “Mukaab”, an iconic landmark featuring the latest innovative technologies. The design of the “Mukaab” includes first-of-its-kind facilities and will be one of the largest built structures in the world, standing 400 metres (m) high, 400m wide, and 400m long.

“Inspired by the modern Najdi architectural style, the ‘Mukaab’ will be the world’s first immersive destination oering an experience created by digital and virtual technology with the latest holographics,” according to the developer.

The “Mukaab” will encompass a tower atop a spiral base, and a structure featuring 2 million sq m of floor space, which will be a premium hospitality destination with a multitude of retail, cultural and tourist attractions, along with residential and hotel units, commercial spaces, and recreational facilities.

NMDC aims to unlock capabilities of promising industries, enable the private sector and increase local content, contribute to the development of real estate projects and the local infrastructure, and diversify sources of income for the Saudi economy. It is expected to add SAR 180 billion to non-oil GDP and create 334,000 direct and indirect jobs once the project is completed by 2030.