Gulf Construction Online - Over 9,000 homes delivered

Saudi Focus

Some 7,500 units have been delivered in Riyadh in Q1.

Over 9,000 homes delivered

01 June 2020

The Saudi government’s drive to increase home ownership for nationals continued to gather momentum in the first quarter of this year, according to JLL, a specialist in real estate and investment management.

With the kingdom’s leadership working on its ambitious plan to boost home ownership to 60 per cent by the year-end, the delivery of residential units for Saudi nationals in Riyadh and Jeddah remained active during the opening quarter.

The Sakani programme is being delivered under Vision 2030 and was launched to provide more than 500,000 residential units across the kingdom, costing an estimated SR500 billion ($134 billion). The aim is to achieve 70 per cent home ownership for Saudi nationals by the end of the decade, said the JLL in its Q1 2020 KSA Real Estate Market Performance report.

In Riyadh, a total of 7,500 units had been delivered in the first three months, while in Jeddah, the number had reached 1,800, it added.

“In the short-to-mid term, demand remains supported by the Sakani programme and the various mortgage products launched over the past couple of years,” remarked Dana Salbak, the head of research for Mena region at JLL.

“However, in light of the current conditions and with no specific stimulus package in support of the residential market, we can expect somewhat of a slowdown in demand over the coming period,” noted Sablak.

Meanwhile, in the office sector, the drop in oil prices combined with shifts in the work environment towards remote working practices has resulted in a slowdown in demand for office space.

According to JLL, this has reflected on the performance of office spaces in Riyadh and Jeddah, resulting in declines of between four to six per cent across both Grade A and Grade B spaces.

The retail sector in the kingdom has enjoyed an improved performance over the past year. However, it is expected to see a prolonged period of lower consumer appetite due to the current global pandemic.

By contrast, demand for retail-driven warehousing will be active as restrictions on movement and trade have led to a shift in consumer behaviour, with online shopping (e-commerce) becoming more popular, it stated.