RIYADH: The Saudi real estate market has marked a sharp drop of 58.6 percent, its lowest record in the housing sector in 2016. It is the result of a significant drop of 56.7 percent in the total weekly sales settling at SR1.9 billion, the lowest weekly level in a decade.
Real estate experts said this drop in sales is caused by the low demand that followed the implementation of the so-called white land fees regulation, which pushed people who want to buy properties to wait for a real decline in prices.
Hamad Al-Dossary, owner of Giant Construction for real estate, said the market’s performance is still weak, and is unable to raise sales and control the drop in demand, as a result of the fees.
Al-Dossary noted that the low-valued sales explain the rigidity of the real estate market, saying this problem can be solved only if traders reduced prices to levels that allow people to buy properties, because the persistence of this condition harms all sides. The investor needs liquidity and the buyer seeks ownership and stability.
Real estate expert Abdullah Al-Mheisen said the current year has witnessed a remarkable decline in prices, which means that the market is on the right path.
Ali Al-Tamimi, CEO of Jabrah Real Estate Company, said the government’s announcement over the availability of 100,000 residential units, which are ready to be delivered, brings strong competitiveness to the commercial sector that should reconsider its projects and strategies, and to work on building units with affordable prices, noting that the government’s launch of similar projects is considered a means of pressure on the private sector.
Al-Tamimi added that the national real estate market cannot endure more decline in its activity. “It will move toward rigidity if the gap between prices and buyer capacity persists.”