Residential markets swell on solid demand for homeownership: Riyadh added some 16.2k new residential units in 1H 2024 alone, bringing its total stock to 1.46 mn units, according to a report (pdf) by real estate services firm Jones Lang LaSalle (JLL). Meanwhile, Jeddah‘s stock was up by 11.3k units to 891k over the same period, with both cities projected to put on an additional 16k units by year-end.

(** Tap or click the headline above to read this story with all of the links to our background and outside sources.)

The number of mortgage contracts in the Kingdom grew 12% y-o-y in 2Q 2024, with a total of 24.5k contracts worth a combined SAR 18 bn

Rental and sales rates are on the up: Riyadh recorded a 10% y-o-y rise in housing sale prices and a 9% hike in rental rates by June 2024. Meanwhile, sale prices and rental rates in Jeddah were up 5% and 4% during the same period.

REMEMBER- Rental rates are a consistent driver of consumer inflation: House rental prices — the heaviest weighted component in the Saudi consumer basket — rose 10.7% y-o-y in August, fueled by a 10.8% spike in apartment rents. Consumer inflation for the month came in at 1.6% y-o-y.

Some challenges remain: Despite a generally positive outlook, rising land rates — especially in Riyadh — volatile construction costs, capacity constraints, and high shipping and financing costs are some of the hurdles developers face. These challenges have delayed some projects, leading some investors to adopt a more cautious approach to the market.

Tags: