In Q3 2023, Saudi Arabia’s residential property market saw a 24% decline in total transaction value, with a substantial 37.5% drop in mortgage contracts year-to-date. Single-family homes dominated lending, comprising 69.8% of the total value, while apartments and land accounted for 24.8% and 5.4%, respectively. Despite these declines, Riyadh, Dammam, and Al-Khobar experienced positive trends in average villa prices. The market’s resilience in the face of decreased transactions is attributed to buyers’ cautious approach amid high-interest rates, awaiting the delivery of anticipated new housing stock in the short to medium term.
In Q3 2023, Saudi Arabia’s real estate sector remained robust, with total transactions hitting 61,473, amounting to 5.9 billion Saudi Arabian Riyal (SAR) ($12.23 billion), as per a report from CBRE. The report highlighted a 16.1% year-on-year increase in the average price of apartments in Riyadh, reaching SR 4,780 per sq. meter. Al-Khobar and Dammam also experienced price growth, while Jeddah’s apartment market was the only one to show a decline in prices.
Raimur Khan, CBRE’s Head of Middle East Research, noted that, excluding Jeddah, all tracked cities in Saudi Arabia witnessed annual price increases in both villa and apartment segments during Q3 2023. Despite a decrease in residential transactions due to high-interest rates, buyers adopting a cautious approach amidst anticipation of upcoming quality stock, these cities demonstrated positive market performance. Jeddah was the sole apartment market experiencing a decline in prices with average apartment prices dropping by 9.5% to reach SR3,872.
In the villa market segment, Riyadh, Dammam, and Al-Khobar experienced price increases in the past year. In Riyadh, the average villa price rose by 1.2% year on year, reaching SR5,615 per square meter. Dammam and Al Khobar witnessed respective increases of 1.8% and 3.2% compared to the same period in 2022, with average villa prices at SR3,565 and SR3,612 per sq. meter. Conversely, Jeddah’s villa segment contracted by 3% during the same period, with average prices at SR5,411 per sq. meter. Despite these price fluctuations, the report indicated a 7% decline in total transactions compared to the third quarter of 2022.
The overall value of residential property transactions in the Kingdom witnessed a decrease of 24%. In the year-to-date figures up to the third quarter of 2023, there was a notable 37.5% decline in the total number of mortgage contracts. Single-family homes constituted 69.8% of the total lending value, with apartments and land making up 24.8% and 5.4%, respectively.
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