The arrival of the holy month of Ramadan has further dampened the already subdued Saudi real estate sector, which typically experiences a lull during ordinary days; the holy month has contributed to a slowdown in the local real estate market, pushing it to new lows, However, the residential rental sector managed to escape this trend and soar in comparison to the real estate sectors with the highest demand and activity, following a near-standstill in sales and purchases that had reached low levels, according to real estate agents who did not place much hope in the Holy Month’s gains due to the general slowdown, a situation that led the residential rental sector to dominate real estate activity.
This comes at a time when real estate offices across the country are seeing high demand for homes offered for annual rent, which has stimulated the real estate sector as a whole and rescued it from the stagnation it has been suffering from. This notable activity has also had a positive impact on many related commercial activities, most notably furniture moving companies, which have mobilized their resources to capitalize on this current surge in activity.
There are many reasons why Ramadan is preferred over other months for moving, including the generally calmer atmosphere during this time, as well as the search for a new home in preparation for the start of the school year. and the long daylight hours during Ramadan remain a strong draw for families to move, particularly due to the significant lull in family visits and hosting guests—all of which have driven a resurgence in the real estate rental sector.
Ibrahim Al-Banyan, who owns a real estate office, explained that there is active movement in properties listed for rent, as many real estate investors rely on families moving during the month of Ramadan to generate revenue and offset the slump they experienced in the period leading up to the holy month. He noted that the movement of tenants in rental homes this month dominates real estate investments as a whole, especially since some are holding back properties listed for rent in order to lease them during Ramadan, to take advantage of the surge in rental activity that occurs periodically at this time. He said: «The high demand has not raised rental prices; rather, they have remained the same. Furthermore, the search for housing near schools remains the most in demand.»
Regarding the most sought-after apartments, Al-Banyan confirmed that new ground-floor apartments are the most desirable and command the highest prices when compared to similar units in the same building, and the rate of interest decreases as the floors get higher. An elevator is also a feature that adds value and serves as a selling point, and apartments of moderate age rank second in terms of price increases, followed by older units, which tenants are less inclined to choose as a marital home—and they are the group driving this demand in the sector, with the exception of a portion of low-income earners. Real estate agencies in Saudi Arabia are seeing a significant increase in requests for homes, especially those near public services and major facilities. However, this has not contributed to raising prices as is customary, given that these agencies need to secure commissions without regard to the rental price, especially since most of these agencies only manage properties listed for sale and do not own them—a factor that has prevented prices from surging to new highs.
On the other hand, Nasser Al-Tuwaim, who runs a real estate investment company, said: «There are many reasons why Saudi families prefer to move during Ramadan, including the long daylight hours that allow them to move furniture into their new home. However, the most important factor driving them to move during this month is the limited number of guests families receive during Ramadan, as they can move freely and settle into their new home before hosting anyone there. Additionally, the generally calm atmosphere in Riyadh during daylight hours allows them to move with complete freedom.»
Regarding the most in-demand options, Al-Tuwaim confirmed that ground-floor and upper-floor units are the most sought-after compared to apartments, despite their scarcity and high prices, especially in the northern neighborhoods, which are experiencing a surge in demand compared to other areas, where rent in Saudi Arabia’s major cities ranges from 20,000 to 60,000 riyals annually, varying by region, finish quality, the building’s age, and its proximity to services and major roads—all of which directly impact the rent.
He added: «The market situation has not changed for a long time, as it has continued to suffer from stagnation in both sales and purchases; however, the relocations that take place during the month of Ramadan each year have stimulated their inventory, and they have begun to earn profits in the form of commissions agreed upon when they rent out any property.».
In a related matter, Abu Islam Sheikh Hussein, who runs a company specializing in furniture moving, explained that they intensify their efforts during the blessed month of Ramadan, considering it a crucial season for generating revenue, especially given the long daylight hours, specifically the afternoon, which lasts more than three and a half hours, and when people have free time, which they use to move between homes.
He noted that customers« moves between rental homes have had a positive impact on them, saying: »Furniture moving companies have mobilized all their resources to achieve the highest possible revenue during this season, which is a gold mine for them, especially since their business relies primarily on seasonal demand.«
He noted that booking workers in advance has become urgent, given the growing demand for them from those seeking to move furniture, especially since skilled laborers specializing in disassembly and assembly are very scarce in the market.
Abu Islam continued, saying, »This demand has not significantly affected prices, but the pressure they face, combined with the strain of fasting and the hardship of the work, takes a different toll,” noting that other workers have taken up furniture moving during these days, and have entered their field in search of money, after seeing the profits they make and the crowds surrounding them. He explained that the real estate sector plays an important role in their earnings, as they are a sector that depends directly on real estate activity; so when it is active, they reap profits, and the opposite is true.
The Saudi market has recently been characterized by widespread speculation and conflicting scenarios regarding the future of the real estate sector, especially in light of rising prices and the government’s approval of a package of historic decisions; however, uncertainty still dominates the overall landscape, as real estate professionals await what the coming days will reveal. Various reports have circulated about an imminent drop in prices, given that current prices exceed the purchasing power of most segments of society in their quest to turn the dream of home ownership into reality, a situation that has benefited the rental sector at the expense of buying and selling, with high hopes that prices will return to normal levels.
(Al-Sharq Al-Awsat)