In the second quarter of 2024, Saudi Arabia registered 24,482 mortgage contracts, reflecting a 12% year-on-year increase, with a total value of SAR 18 billion (USD 4.86 billion). Demand for residential properties is being driven by younger Saudis and the Kingdom's Vision 2030 initiative. Riyadh's housing stock has grown to 1.46 million units, while Jeddah's has reached 891,000, with more units expected in the future. Despite rising land prices and construction delays, the market remains resilient, with increasing property prices and rental rates. This housing expansion aligns with Vision 2030's goals of enhancing quality of life and improving access to affordable housing for the growing population.
According to a report by real estate firm Jones Lang LaSalle, the total value of mortgage contracts in Saudi Arabia in the second quarter of 2024 indicate a 8% year-on-year growth. This rise in mortgage activity underscores the ongoing demand for residential properties and the government's focus on promoting homeownership among Saudi citizens.
The Kingdom's property market is experiencing rapid expansion, driven by increasing housing demand, particularly in major cities like Riyadh and Jeddah. In the first half of 2024, Riyadh's housing stock increased to 1.46 million units, while Jeddah's inventory grew to 891,000 units. This growth is part of Saudi Arabia's efforts to meet the housing needs of its expanding population and support independent living arrangements.
During the first half of 2024, Riyadh added approximately 16,200 residential units, while Jeddah contributed 11,300 units to its housing stock. The report projects that an additional 16,000 units will be added in the second half of the year across both cities. This development is driven by the younger generation's preference for independent living, supported by the Kingdom's Vision 2030 initiative, which aims to enhance quality of life through urban development and an expanded housing sector.
The increase in housing supply has led to innovative designs that cater to the preferences of younger Saudis. However, this rapid development has not been without challenges. Rising land prices in Riyadh have become a significant issue for developers, and the construction sector faces difficulties due to global economic factors, local capacity constraints, and increasing shipping and financing costs. These challenges have caused delays in some projects, prompting both owner-occupiers and investors to adopt a more cautious approach.
In terms of market performance, Riyadh has seen a 10% year-on-year increase in property sale prices and a 9% rise in rental rates as of June 2024, indicating strong demand. Jeddah has also shown growth, though at a slower pace, with sale prices rising by 5% and rental rates by 4%.
Despite these challenges, the residential property market in Saudi Arabia remains resilient. Developers are adapting to changing conditions by managing costs more effectively and improving construction processes to ensure the continued delivery of new housing units. This adaptability is helping the sector navigate the difficulties posed by rising expenses and market volatility.
The expected addition of 16,000 residential units in Riyadh and Jeddah during the latter half of 2024 suggests that Saudi Arabia is on track to meet the growing demand for housing. This expansion in housing supply aligns with the broader goals of Vision 2030, which aims to enhance the quality of life for Saudi citizens by improving urban infrastructure and increasing access to affordable housing.
In conclusion, the housing market in Saudi Arabia is experiencing significant growth, marked by rising mortgage activity and an increase in housing supply. While developers face challenges such as land costs and construction expenses, the market is adapting to meet the needs of a growing population. This growth is an essential step in achieving the Kingdom's Vision 2030, which focuses on urban development and creating a sustainable living environment for future generations.
Advertisement
Facebook
Whatsapp
