Saudi real estate: Jeddah prices stumble as national transactions … – Arabian Business

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Saudi Arabia’s residential real estate market has witnessed a fall in the volume and value of transaction in the past year, according to CBRE analysis.

Jeddah has seen the biggest impact, with the price of villas and apartments falling in the region.

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Despite property prices increasing in other parts of the country, the overall value of real estate transactions in the country has shown double digit decline compared to Q3 last year.

Saudi real estate sales slowdown

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 totalled 61,473, equating to a total value of SR45.9bn ($12.2bn).

In comparison to the same period in 2022, the total number of transactions demonstrated a drop of 7 per cent, while the total value for these transactions decreased by 11.3 per cent.

The total number of mortgage contracts in the year to date to Q3 2023 fell by 37.5 per cent, where the total value registered, which totalled SR18.4bn ($4.9bn), fell by 38.3 per cent.

Single-family homes in Saudi Arabia accounted for 69.8 per cent of the total value of lending, followed by apartments and land at 24.8 per cent and 5.4 per cent respectively.

In Riyadh, as at September 2023, the average price for apartments rose to SR4,780 ($1,274) per square metre, a growth of 16.1 per cent compared to a year earlier.

During this period, Khobar’s average apartment prices saw an uptick of 2.9 per cent to reach SR3,424 ($913) per square metre, while Dammam’s average apartment prices rose by 2.4 per cent to stand at SR2,862 ($763) per square metre.

The only apartment market to regress in terms of prices was in Jeddah, where average apartment prices fell by 9.5 per cent to reach SR3,872 ($1,032).

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 per cent year-on-year, reaching SR5,615 ($1,497) per square metre.

Elsewhere in Saudi Arabia, Dammam and Khobar’s average villa prices increased by 1.8 per cent and 3.2 per cent over the same period in 2022, where average prices registered at SR3,565 ($951) and SR3,612 ($963) per square metre, respectively.

Jeddah’s villas segment contracted in the year to Q3 2023 by 3 per cent, where average villa prices stood at SR5,411 ($1,443) per square metre.

Taimur Khan, Head of Research – MENA at CBRE in Dubai, 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.”

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