The last period witnessed a decrease in real estate activity in the Holy Capital market in the residential sector by 4.60% and commercial by 6.86 %, as the total number of transactions in 1435 AH reached 17351 transactions, compared to 18262 transactions in the year before that, which is the time period of the study period. This was revealed by a recent specialized study prepared by the Information Center at the Chamber of Commerce and Industry in Makkah.
Real Estate Indicators
The study, which relied in its results on the reading of real estate and housing indicators issued by government and official bodies, showed that despite the decrease in activity, there is an increase in the value of liquidity, as the indicators proved this increase in the value of the annual average price of one real estate transaction.
According to the study of the Information Center of the Makkah Chamber of Commerce and Industry, the real estate recorded a relative rise for the year 1435 AH at the residential and commercial level, as the real estate indicators issued by the Saudi Ministry of Justice indicate an increase in the value of total real estate transactions, where residential real estate jumped by 2.88% and commercial by 7.35 % from 1434 AH, in terms of the total value of physical liquidity.
The study showed that the total value of transactions in residential and commercial real estate transactions for the year 1435 AH, whether land, villa, apartment or others, amounted to about 63.8 billion SAR, of which 53.7 billion SAR for residential and 10.1 billion for commercial, while in 1434 AH, the total value of transactions was estimated at 52.2 billion SAR for residential and 9.4 billion SAR for commercial transactions.
Liquidity and real estate
The Makkah Chamber study said: «If we take into account that the amount of disparity between the total monthly operations for 1435 AH is 1.8 billion, and the figures also indicate that the average value of monthly real estate operations in Mecca is 4.8 billion, and the disparity between the average prices per meter between the central area and other neighborhoods, we find that the increase in real estate liquidity in the residential or commercial sector is statistically unimpressive, but at the same time the general indicator directs us that there is stability in the market.»
Real estate liquidity in the residential or commercial sector is statistically insignificant, but at the same time the general indicator directs us to the fact that there is stability in the market. <According to the Makkah Chamber Information Center report, real estate lands account for the lion's share of the total real estate transactions, whether commercial or residential, representing 82% of the total real estate transactions, which is a very large percentage indicating the saturation of lands in the real estate market, followed by real estate apartments with a percentage of 6.87 % of the total real estate transactions, then agricultural lands 4.18, villas 3.08 %, then come in very small percentages such as exhibitions or shops, houses and buildings.
The Makkah Chamber report estimated the price per meter in the city of Makkah, whether in the central area «close to the Haram» or far away at 1922 Saudi riyals, noting that there is a large disparity between the prices of lands near or far from the Haram, for example, the average price per meter in the Shubaika area «close to the Haram» is estimated at about 101 thousand riyals, and the Ajiad area about 50 thousand riyals, in contrast, the average price per meter in the Shawkiya area is 1200 riyals and Awali 3250 riyals per meter.
Specificity of Makkah
According to the Makkah Chamber study, the total market value of real estate in Makkah during the month of Ramadan reached its lowest levels ever compared to other months, and the total value of real estate transactions in the month of Ramadan in 1435 amounted to about 2.5 billion Saudi riyals, a decrease of 7.% from 1434, if the month of Safar in 1435 is excluded, in which the volume of transactions reached about 2.3 billion, the lowest value witnessed by the market during the study period.
<The study continued: «In second place in the total real estate transactions are apartments, after they were less popular than villas in 1434 AH, but in 1435 the percentage of transactions in the apartment sector increased and constituted 6.87 % of the total real estate transactions, the number of deals increased to more than 53 % with 1153 deals, and the average price of a residential apartment in the holy capital is 732 thousand Saudi riyals.»
The study pointed out that Makkah's residential projects and expropriation works, which forced many to search for new housing, it is expected that the increase in the number of apartment purchase deals is a result of these operations, after which Makkah witnessed the start of implementing new development projects, in addition to the areas expropriated in favor of the expansion of the Grand Mosque.
