As expected, the real estate index until the end of 2015 achieved a decrease in the value of transactions compared to 2014 by 22.5%, achieving 348.4 billion riyals, while the value of real estate transactions in 2014 amounted to 449.7 billion riyals. The decline in the value of real estate market transactions for 2015 compared to 2013, which amounted to about 418.9 billion riyals, amounted to 16.9%.

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Real estate sales decline

As a result of the overall decline in real estate market transactions, the sales of its sectors declined unevenly, as follows:

The highest percentage of decline was recorded by agricultural lands with a decrease of 60.0%.

Then the value of villa transactions with a decrease of 58.11 TP3T.

TP3T.

Then the transaction value of commercial centers with a decrease of 38.1%.

TP3T.

Then buildings with a decrease of 35.0%.

TP3T.

Then came the value of real estate transactions on land plots with a decrease of 21.4%.

Real Estate Index Analysis

Observers believe that the biggest sufferers of this decline in terms of monetary value are the two sectors (agricultural land and land plots) because these two types represent the largest percentage of the real estate market transactions, which reached about 90.0% of the total value of market transactions by the end of 2015, while the ratio of land transaction areas to total market transaction areas rises to about 99.1%.

Analysts attribute the decline in the real estate index to the decline in the value of the real estate market. Analysts attribute this decline in the values of transactions on land of all types, agricultural, commercial and residential, to several considerations, the most important of which is the entry of several measures and regulations on the market during the past year, most notably the announcement of the adoption of the system of fees on white lands within cities and governorates, whose actual results will appear after its implementation in mid-2016, in addition to the decrease in the intensity of speculation on land due to the low levels of liquidity in the economy and the market in particular, and the sharp decline in oil prices over the past 18 months had a negative impact on the volume of liquidity in the market.

Analysts attribute this decline to several factors, the most important of which is the entry of several measures and regulations on the market during the past year.