The central region achieved the highest real estate price during the first quarter of 2017, where the average price per square meter reached about 2575 riyals, while the price in Riyadh reached about 2948 riyals per square meter. The southern region recorded the lowest average price per square meter to reach about 1171 riyals per square meter. The rise in residential real estate prices in the Kingdom during the first quarter of 2017 reflects what was observed for real estate financing activities included in the SIMAH Real Estate Finance Index, which was recently launched.
According to the index, the average price per square meter for residential real estate in the Kingdom was about 2575 riyals. <According to the index launched by the Saudi Credit Information Company (SIMAH), the Kingdom's house price index rose nine points by the end of the first quarter of this year, reaching 83 points compared to 74 points at the end of the fourth quarter of 2016. The index indicated that this rise represents the first significant increase in the average price values of residential real estate since the fourth quarter of 2015. While the residential real estate price index fell steadily during 2016 from 90 points in the first quarter of the year to 74 points by the end of the fourth quarter of the same year.
Built on a sample of more than 40,000 real estate records provided by some of the largest mortgage providers in the Kingdom, the index measures the change in residential real estate prices on a quarterly basis starting from the first quarter of 2013, while the base point of the index is 100 points.
The upward trend in the residential real estate price index has been steadily declining throughout 2016 from 90 points in the first quarter of the year to 74 points by the end of the fourth quarter of the same year.
The upward trend in average residential property prices, accompanied by a rise in credit inquiries for mortgage products and new loans registered, clearly reflects that consumers are actively investing in the real estate sector again after the market slowdown and difficulties in 2016.
The report stated that the reduction of the down payment ratio for residential properties from 30% to 15% positively affected the average prices of residential properties.
It is worth noting that the reduction of the down payment ratio for residential properties from 30% to 15% positively affected the average prices of residential properties. <It is worth noting that the index was built using the “pricing by utility” method, which is the same method used in a number of major house price indexes in several countries such as the United Kingdom, Australia and the United States, it is noteworthy that SIMAH's house price index will be published in August.
