Real estate development companies are seeking to increase their production volume and sales of ready-to-move-in real estate units. This increase is almost always annual—a goal for which these companies were established and through which they seek to achieve a return on invested capital. However, many of them face a slowdown in sales “decline in sales,” often evident according to numerous indicators that illustrate this downturn.

Most of us know that the real estate market, like other markets, is subject to basic economic principles, foremost among them the principle of supply and demand. When demand for real estate increases among buyers, prices tend to rise significantly, while a decline in demand leads to a gradual decrease in prices. Conversely, an increase in the supply of real estate helps limit price increases or even lower prices due to the availability of options for buyers and diversity in a decrease in supply, coupled with sustained or increasing demand, leads to a noticeable rise in prices. Therefore, changes in supply and demand levels are the primary factors explaining the rise and fall of real estate prices.

In my opinion, the main issue behind this decline in sales is that the management of these companies has failed to clearly read the market. The recent decisions issued to achieve balance in the real estate sector in the capital, Riyadh, have begun to have an impact on the market, According to data from the General Authority for Statistics, real estate prices fell by 1.6% during the first quarter of this year, and villa prices declined by more than 6%, according to the latest statistics, Therefore, these companies must take current market prices into account and reduce the prices of their real estate units in line with current demand; otherwise, they will face a significant drop in sales and consequently fail to generate returns for investors.
@MounesShujaa