Saudi Arabia's Sakani programme lifts residential market
Kingdom’s Sakani programme, regulatory efforts to expand the mortgage market, are stabilising residential sales prices
The volume of transactions in Saudi Arabia’s real estate market is expected to maintain a positive momentum during the next 12 months, lifted by the kingdom’s Sakani affordable housing programme and its regulatory efforts to expand the mortgage market, according to Knight Frank’s Saudi Arabia Real Estate Market Update Q3 2019 report.
The increase in the number of transactions and the value of transactions is resulting in the stabilisation of sales prices.
The report states that the number of residential transactions in Riyadh rose 122% in Q3 2019, and the value of the transactions climbing 139%, compared to the same period last year, which demonstrates a recovery in the residential market for the fourth consecutive quarter, and points to improving consumer sentiment as well as a stabilisation is sales prices.
Residential supply in Riyadh reached 1.24m units at the end of Q3 2019, with approximately 8,000 residential units added to the market. The report projects that 70,000 additional units will be handed over between 2019 and 2021.
Following a marginal year-on-year decrease in previous quarter, residential sale prices appear to have stabilised in Q3 2019, as villa sale prices showed a 1.4% increase in Q3 2019, compared to the same period last year, indicating that the market may be heading towards to the bottom of its cycle.
In terms of apartment sale prices, the report indicates that the rate of decline continued to moderate in Q3 2019, dropping marginally by 0.4% year-on-year, compared with a 6% year-on-year drop in Q2 2019, and a 10% drop in Q1 2019.