RIYADH — The average price index of the Saudi real estate market has held steady, Injaz Development Company said in its recent study. However, the sector is expected to achieve a sustained increase in demand and supply within the next several months in light of the newly approved Saudi Mortgage Law.
The projected rise in real estate prices may be attributed to the Kingdom’s strategic location, nature of land and quality of planning, as demand for integrated urban projects continues to help generate new investment opportunities.
The upward direction of land prices, despite the strong need for mortgage financing, is poised to bring in a reasonable 20 percent increase in the prices of residential villas across the Saudi market, particularly in Riyadh and Jeddah, following the increase in the prices of land properties.
Increase in land prices also driven prices of residential apartments, and low and mid-income earners’ residential units and properties witnessed an increase in the rental value buoyed by the strong demand from Saudi citizens and residents.
That said, real estate brokers believe that the easy access to residential financing by Saudi nationals through the Real Estate Development Fund will boost demand and supply for residential housing, therefore contributing to the growth of the Saudi real estate market.
Based on the findings by Business Monitor International, the Saudi construction industry is expected to grow by 5.4 percent by the end of 2012, in line with the government’s spending policy aimed at the development of basic infrastructure in the Kingdom.
Moreover, as part of ongoing efforts by the Ministry of Housing and the Real Estate Development Fund, a comprehensive strategy has been announced to fund residential projects. Subsequently, a total of 11,666 housing loans collectively worth SR 5.8 billion have been recently awarded for the construction of 14,000 housing units in Eastern, Western and central regions.
Injaz study further pointed out that Saudi Arabia’s real estate market has maintained its energetic growth pace in the fourth quarter of 2012, as clearly reflected by the growing number of new investment opportunities and a surge in local land purchases, which has helped maintain competitive prices.
Kingdom-based real estate experts, on the other hand, emphasized the need to adopt effective policies aimed at market growth, while boosting cooperation between the private and government sectors to drive real estate investments and development projects. Standard & Poor’s forecasts for 2012 reveal a robust 6 percent GDP (gross domestic product) growth in Saudi Arabia, with $67 billion to be invested in the development of 500 new residential units across the Kingdom.
Omar Al-Kadi, CEO and Managing Director, Injaz Development Co, said major development projects being implemented in different parts of Saudi Arabia are fuelling real estate activity and have made significant contributions to the Saudi economy. The increase in real estate demand is poised to keep the market active on the long term, enabling it to better serve the Saudi society with full-service urban projects and residential housing programs.
Injaz has revealed that it is offering its sqm 566 Al Gamra 10 project tomorrow for sale in a public auction to complement the robust market conditions. A key attraction of this project is its naturally elevated land compared to other plots located to the north of Prince Salman Road, given that the more elevated the land is, the more it is valued by clients.
The project is also easily accessible through a network of roads and enjoys a well-developed infrastructure and architectural design, including green spaces and wide sidewalks that have been developed according to the highest standards. — SG