Saudi Arabia’s Real Estate Market Sees a 1.7% Increase in Price Index
In a recent report released by the General Authority for Statistics, it was revealed that Saudi Arabia’s real estate price index has edged up by 1.7 percent in the second quarter of 2024 compared to the same period last year. This increase was primarily driven by a surge in residential sector costs.
Residential Sector Prices on the Rise
The housing sector prices saw a significant increase of 2.8 percent year-on-year in the second quarter, mainly attributed to a 2.8 percent rise in land plot costs. The development of the residential sector is crucial for Saudi Arabia’s economic diversification as it transitions into a tourism and business hub.
Projections for the Real Estate Industry
Saudi Arabia’s real estate industry is one of the fastest-growing sectors in the Middle East, with a projected market volume of $69.51 billion in 2024 and $101.62 billion by 2029. The estimated compound annual growth rate is 8 percent, according to the Real Estate General Authority.
Commercial Sector Prices Stabilize
While the residential sector saw a significant increase, the commercial sector experienced a decrease of 0.4 percent year-on-year in the second quarter. This was mainly due to a decrease in the prices of commercial land plots by 0.4 percent. However, prices of commercial buildings and centers remained stable.
Quarterly Analysis
Compared to the first quarter of the year, the real estate price index surged by 1.1 percent in the second quarter. The increase was driven by a rise in residential sector prices, influenced by the prices of residential land plots. Apartment prices increased by 2.1 percent quarter-on-quarter in the second quarter.
Conclusion
Overall, the real estate market in Saudi Arabia is showing positive growth, with the residential sector leading the way in price increases. As the country continues to focus on economic diversification, the real estate industry is expected to play a crucial role in its development.