Riyadh: Owing to Saudi Arabia’s development boom, Riyadh has witnessed a 20 percent hike in home prices, while Jeddah remained affordable.
The latest development seems to be posing difficulties for numerous Saudis, as they find it difficult to own an apartment in the capital city. The prices of villas have also increased by 18.6 percent, these may go even higher in the near future.
Over the past year, 27 percent of home buyers have pulled out of transactions.
“In Saudi Arabia, the government’s programs to boost homeownership have turbo-charged demand, development activity, and house prices,” Partner – Head of Middle East Research at Knight Frank, the UK consultancy Faisal Durrani was quoted as saying by Gulf News.
Riyadh’s growth as a financial hub
One of the major reasons for the apartment price hike in Riyadh is the migration of younger generations who have been heading to the capital in search of better job opportunities and higher income. It is also the reason why the apartment prices have remained high despite a considerable number of people pulling out of transactions.
A more stable Jeddah
In contrast, the home prices in Jeddah have remained stable, with apartments seeing a meager hike of 4.9 percent in the first quarter of 2021. Similarly, there was a hike of 1.2 percent in villa prices.
According to a Knight Frank survey, the slight hike in the prices gave a slight nudge to residential transactions were up 5 percent in the last 12 months, while the total value of residential sales increased 46 percent.
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