- 95K transactions in Riyadh, Jeddah and Dammam
- 3% increase in apartments and villas offered in Riyadh
- 1.1 million housing units offered in Jeddah
- 3.5 thousand riyals per m2 in Dammam
Sales of villas and residential units in Saudi Arabia rose in the first nine months of 2022, compared to 2021, supported by continued strong demand, Deloitte revealed in a report on the performance of the Saudi real estate market.
Deloitte revealed in a report on the performance of the Saudi real estate market.
Supply in the residential real estate segment in the key markets of Riyadh, Jeddah and Dammam Metropolis increased during the first nine months of 2022 compared to the same period in 2021.
Projects delivered by the Ministry of Housing accounted for the bulk of the supply, such as Diyar Al Saad Housing Complex, Ajlan Riviera 21 in Riyadh, Al Farida Housing and Nassaj Town 2 in Dammam. <span style="font-weight: 400
Real estate deals According to the report, the total number of residential real estate transactions in Riyadh, Jeddah and Dammam metropolis reached 95 thousand transactions, with a total value of 536 billion Saudi riyals ($142.5 billion). The report revealed the growth of sales prices and rents in Riyadh, Jeddah and Dammam metropolis, and the growth of sales prices reached a decimal value based on transaction data available through the Ministry of Justice.
Villas in Riyadh remain a favorite among citizens, while apartments are becoming more popular after an increased focus on less expensive housing, as well as the launch of better quality projects in the market.
The firm noted that despite the shift towards smaller housing units, supply in the market has not yet reached the level of current housing need, given that the majority of developers of large-scale projects typically target the high-income segment.
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Rising demand
Jeddah's demand for mid- to high-cost residential units is on the rise, with demand for quality apartment schemes continuing during the pre-construction phase.
In the Dammam metropolitan area, most of the residential real estate supply is located in the northern areas of the city, and the current supply targets the middle segment of the population, in standalone villas or apartments of low to mid-rise buildings.
Supply of residential units in Riyadh increased by 3% with 1.3 million units, followed by Jeddah with a growth of 2% and 1.1 million housing units, and Dammam with 0.54 units, a growth of 1%.
The supply of residential units in Riyadh increased by 3% with 1.3 million units.
With regard to average sales prices and rents during the third quarter of 2022, the average prices for villas in Riyadh recorded SAR 5,071 per m2, up 16%, and SAR 4,679 per m2 for apartments, up 22%, while average rents reached SAR 45 to 130 thousand for villas, up 6%, and 30 to 100 thousand for apartments, up 6%.
Riyadh's average sales prices and rents during the third quarter of the year 2022 reached SAR 5,071 per m2, up 16%.
The average prices of villas in Jeddah were SAR 4,191 per m2, up 29%, and SAR 3,959 per m2 for apartments, up 4%, while the average rents for villas were SAR 60 to 175 thousand, up 6%, and SAR 14,400 to 75 thousand for apartments, up 18%. In the Dammam metropolis, the average selling price of villas was SAR 3,502 per m2, up 4%, and SAR 3,377 per m2 for apartments, up 7%, while the average rents for villas were SAR 36 to 120 thousand, down 6%, and apartment rents ranged from 15 to 36 thousand SAR, up 18%. Deloitte said in its report that the office supply in Riyadh in Q3 2022 was 5.2 million units, up 13%, in Jeddah 1.3 million units, up 19%, and in Dammam metropolitan area 1.3 million units, up 2%. Deloitte reported that the office supply in Riyadh, in Q3 2022, was 5.2 million units, up 13%.
According to the report, the average office rents in Riyadh recorded SAR 1,465 per m2, up 3%, Jeddah 1,008 per m2, down 2.5%, and SAR 920 per m2 in Dammam metropolis, down 3%. The notable additions to the market during 2022 included the Saudi British Bank's headquarters on King Fahd Road, King Abdulaziz City for Science and Technology, the government department complex in Riyadh, as well as the Saudi Arabian Airlines cargo terminal offices in Jeddah. The main driver of the post-pandemic recovery in the office sector has been higher government spending on infrastructure projects, such as the expansion of Riyadh airport.Office Market
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Demand for Class A properties in Riyadh remains strong as a result of the government's focus on developing the city as a regional hub for international companies, while in Jeddah and Dammam, the supply of Class A properties is mainly focused on government offices and public sector entities.
According to Deloitte, landlords are offering incentives, such as free periods and smaller, fully equipped units, to attract a wider range of tenants. Lease terms typically correspond to the size of the unit, with larger units being leased for longer periods of 6 to 9 years. According to Deloitte.
The report concludes that as new high-quality units enter the market, the current supply of Class A properties will come under pressure due to the increased level of competition, and this will likely lead to lower rents and occupancy rates in Class B properties. The report concludes that as new high-quality units enter the market
