Interest rates have become one of the factors that affect the decision to buy real estate, especially within Saudi Arabia, where the market dynamics have changed under interest rate movements, showing different indicators on the behavior of those wishing to buy, and the volume of real estate transactions.
Interest rates affect the decision to buy real estate.
The impact of interest rates on the decision to buy real estate
According to statistics, the volume of real estate loans granted to individuals and institutions in Saudi Arabia until the end of 2024 amounted to about 883.3 billion riyals, 771 TP3T.
Interest between supply and demand
As interest rates rise, and the purchasing power of real estate decreases for some, some developers have resorted to offering special offers or installments to avoid this decline in purchase volume, and statistics indicate that periods of stable interest rates, such as early 2024, the value of real estate transactions increased by 35% compared to the same period in 2023.
Government agencies have also resorted to launching support programs through the availability of subsidized loans such as Sakani program, which has met with great demand from citizens to take advantage of its benefits, and the Saudi market is classified as one of the most supportive markets for citizens in the process of buying real estate.
According to expectations, if interest rates fall, there will be a gradual return to the demand for purchase, an increase in demand for real estate loans, and a greater real estate recovery in secondary cities to the high real estate prices in the capital.
