Data released by the Ministry of Justice revealed a decline in real estate transactions in Riyadh during the month of February, with villa transactions falling by 10.9% and land transactions by more than 17.9 %, while apartment transactions recorded a slight decline of 0.8% in the same month, influenced by several factors, most notably rising interest rates, the start of the holy month of Ramadan, and the transition of housing subsidies to a matrix system.

Decline in real estate transactions last year

The data also showed a decline in real estate transactions completed last year, by 11 % to reach approximately 193.45 billion riyals, compared to the same period in 2022, The number of real estate transactions last year reached approximately 172,070, while the number of properties sold stood at 177,500.

Real estate transactions in 2023 also recorded a decline in 7 months, with April 2023 seeing the sharpest drop at 47 %, followed by February of the same year with a 40% decline, while the value of transactions rose during five months of last year, led by July with a 65% increase.

Decline in New Residential Mortgage Financing

In the same context, the latest data released by the Saudi Central Bank (SAMA) revealed a decline in new residential mortgage financing granted to individuals by banks in the Kingdom—excluding finance companies—in the fourth quarter of 2023 to 19.658 billion riyals, compared to 23.097 billion riyals in the corresponding quarter of 2022.

According to SAMA’s data, villas accounted for the largest share of financing granted by banks in the fourth quarter, at 13.125 billion riyals, followed by apartments at 5.584 billion riyals, and then land at 949 million riyals.

Meanwhile, in December of last year, this financing totaled 6.237 billion riyals, down from 6.655 billion riyals in November 2022. Loans for villas maintained the largest share at 4.307 billion riyals, followed by apartments with 1.676 billion riyals in financing, and then land with 255 billion riyals.