Bloomberg reported that apartment prices in Saudi Arabia rose at the fastest pace in 5 years, driven by a government plan to boost home ownership by building affordable housing and offering cheap loans.
Apartment prices in the capital, Riyadh, and the city of Jeddah on the Red Sea have risen by 17% and 12%, respectively, over the past twelve months, according to data from a real estate consultancy, Knight Frank.
Referring to Saudi Crown Prince Mohammed bin Salman’s plan to move the Saudi economy away from oil, Faisal Durrani, head of Middle East research at Knight Frank, said, “Home ownership has actually become more affordable since the launch of the transformation plan.”
“Two-bedroom apartments, for example, cost an average of 2.4 times annual income, compared to a multiplier of 2.7 times in 2016, which is well within globally accepted affordability thresholds,” Durrani added. While villas are also becoming more affordable, they still cost anywhere between 7-12 times the annual income.
While villas are also becoming more affordable, they still cost anywhere between 7-12 times the annual income.
Social changes in the Kingdom are expected to shift demand away from traditional standalone properties such as villas and towards smaller units, with community and lifestyle at the heart of developments, providing modern amenities, and set to reshape the residential landscape in Saudi Arabia.
Source: Bloomberg
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