Saudi Arabia’s residential property prices remain resilient despite softening transactions figures in the third quarter of the year. In the year to Q3 2023, the total number of residential transactions totaled 61,473, equating to a total value of SAR45.9 billion ($12.2 billion), according to leading real estate specialist CBRE.

 

In the year to Q3 2023, the total number of residential transactions totaled 61,473, equating to a total value of SAR 45.9 billion. In comparison to the same period in 2022, the total number of transactions demonstrated a drop of 7.0%, while the total value for these transactions decreased by 11.3%. 

 

The total number of mortgage contracts in the year to date to Q3 2023 fell by 37.5%, where the total value registered, which totaled SAR18.4 billion, fell by 38.3%. Single-family homes accounted for 69.8% of the total value of lending, followed by apartments and land at 24.8% and 5.4% respectively, it stated.

 

In Riyadh, as of September 2023, the average price for apartments rose to SAR4,780 per sq m, thus registering a growth of 16.1% compared to a year earlier. 

 

During this period, Khobar’s average apartment prices saw an uptick of 2.9% to reach SAR 3,424 per sq m, while Dammam’s average apartment prices rose by 2.4% to stand at SAR2,862 per sq m. The only apartment market to regress in terms of prices was in Jeddah, where average apartment prices fell by 9.5% to reach SAR3,872.

 

In the villa segment of the market,  average prices in Riyadh, Dammam and Khobar have shown gains in the 12 months to Q3 2023. In Riyadh, the average price for villas improved by 1.2% year-on-year, reaching SAR5,615 per sq m, said the report by CBRE. 

 

Dammam and Khobar’s average villa prices increased by 1.8% and 3.2% over the same period in 2022, where average prices registered at SAR 3,565 and SAR 3,612 per sq m, respectively. Jeddah’s villas segment contracted in the year to Q3 2023 by 3.0%, where average villa prices stood at SAR 5,411 per sq m, it stated.

 

Taimur Khan, Head of Research (Mena) said: "With the exception of Jeddah, Saudi Arabia’s residential market posted yearly price increases in all tracked cities in Q3 2023, across both the villa and apartment segments. These performances were achieved despite a fall in residential transactions, which stemmed from high interest rates and as buyers continue to adopt a wait and see approach in anticipation of new quality stock which is set to be delivered in the short to medium term."

 

"Still, we expect residential prices to steadily improve as additional quality stock will come online and further financing solutions will be introduced into the market," he added.-TradeArabia News Service