The value of real estate transactions during 2019 rose to 180.2 billion riyals, an increase of 26.5%, compared to its decrease during 2018 by 36.3%, the increase came due to the increase in the value of residential sector transactions by 35.1%, compared to its decrease during 2018 by 31.2%, to settle by the end of the year at the level of 136.7 billion riyals «75.7% of total market transactions».
While the commercial sector increased by 5.6%, compared to its decrease during 2018 by 46.2%, to stabilize at the end of the year at the level of 43.9 billion riyals "24.3% of the total market transactions".
The commercial sector increased by 5.6%, compared to its decrease during 2018 by 46.2%.
78.7 billion riyals of loans to individuals
Specialists attributed the recovery of the real estate market and the growth of housing sector activity to the record increase in the volume of real estate financing granted to individuals during the past year 2019, which amounted to about 78.7 billion riyals, an increase of 167%, and accounted for about 58% of the total value of residential sector transactions, and accounted for about 60% of the total value of land, villa and apartment transactions. The pace of real estate financing escalated from about 38% of the total value of residential sector transactions at the beginning of the year, to more than 85% of the total by the end of the year.
Rising land and residential real estate prices
Most land and residential real estate prices witnessed an increase during 2019, influenced by the high activity of the local real estate market, as a result of the increased injection of mortgage loans in the residential sector in particular at unprecedented levels, at the level of the full-year performance, the contribution of these mortgage loans to individuals for every 1.0 million riyals, pumped to buy land, villas and apartments, reached about 600 thousand riyals out of every 1.0 million riyals.
Residential real estate prices rose.
The flow of these mortgages throughout 2019 took an increasing pace from the beginning to the end of the year, starting from a contribution of about 401.3 thousand riyals (40.1% of the value of land, villa and apartment transactions) per 1.0 million riyals during January 2019, until it reached about 854 thousand riyals (85.4% of the value of land, villa and apartment transactions) per 1.0 million riyals by the end of the year.
And the flow of these mortgage loans throughout 2019 has been increasing at an escalating pace from the beginning to end of the year.
Liquidity of loans and rising prices
Followers of real estate activity note that the increase in the volume of real estate loans, which came after a long period of stagnation in the real estate market for more than four years ago, was enough for prices to rise and inflate again, which the market witnessed during 2019, and appeared significantly during the fourth quarter of the year, which recorded a growth in the quarterly average for the fourth quarter of 2019 compared to the same quarter of 2018, reaching 14.6% for residential land, 12.2% for residential villas, and 9.5% for residential apartments, while at the level of annual changes in the prices of residential land and real estate, the results came as follows.
211.1 billion riyals real estate loans to individuals
Observers estimate that the balance of mortgage loans granted to individuals by the end of last year 2019 will rise to more than 211.1 billion riyals, recording an annual growth of 38.9%, and the volume of new mortgage financing granted to individuals during the same year to 78.7 billion riyals, recording a growth compared to its volume during 2018 "29.5 billion riyals" of about 167%.
At the level of the number of individual borrowers of these real estate loans, it is estimated that by the end of 2019, their number rose to more than 394.9 thousand borrowers, compared to their numbers during 2018 at 218.5 thousand borrowers, recording an annual growth of 80.7%, and this reveals a numerical increase in the number of individual borrowers for residential real estate loans exceeded 176.4 thousand borrowers during 2019, compared to their numerical increase of 50.5 thousand real estate borrowers during 2018.
