Riyadh apartment prices soar as villas feel the heat

A residential compound in the south of Riyadh. Apartment prices rose sharply in the city last year while villa prices remain under pressure. (Reuters)
Updated 06 February 2018
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Riyadh apartment prices soar as villas feel the heat

DUBAI: Apartment prices in Riyadh leapt by up to 36 percent last year and are set to rise again this year, according to a survey of the Saudi Arabian residential property market by international real estate consultants Knight Frank.
“Demand for residential property is expected to be underpinned by a growing population, the lack of existing good quality stock and a long-term trend toward smaller average household size. These factors should inevitably fuel the demand for residential units in Riyadh,” the report said.
However, the positive outlook in the capital masks a softer market in Jeddah and Eastern Province, as well as declining prices for villa properties across the Kingdom, the report found. The price of villas in the capital fell by 5 percent last year. In Jeddah and Eastern Province, prices fell by 24 percent and 28 percent, respectively.
“A common trend witnessed in sales prices across key cities is that apartment prices have been less affected than villa prices as a result of a shift in demand from villas to apartments due to affordability constraints,” said Raya Majdalani, research manager at Knight Frank.
The Kingdom’s residential market took a big hit in 2016 when the impact of the fall in oil prices was at its most intense, but recovered to some extent last year as crude prices strengthened and government measures helped ease financial pressure on Saudi households.
“While we see current dynamics prevailing in the short term, we remain broadly positive as a result of government initiatives aimed at addressing key challenges restraining the residential sector,” Majdalani said.
Recent initiatives include the release of regulations for the introduction of a 2.5 percent tax on undeveloped land plots, approval of regulations for the use and listing of real estate investment trusts, the introduction of a new mortgage law to boost home ownership, the development of the Sakani home-building program by the Ministry of Housing, the launch of the Wafi online program to grant off-plan sales, and the creation of a real estate refinance company by the Public Investment Fund.
In Riyadh, the volume of residential transactions increased by 15 percent, but their value was down 3 percent on average. In Jeddah, volume was flat but value dropped 21 percent, while in Eastern Province volume fell slightly (2 percent down) and value slipped by 9 percent.
Apartments in the north of Riyadh, near the Northern Ring Road, were the most expensive, while Al-Aziziya and Al-Shifa were the lowest valued, Knight Frank said.


‘There is no free lunch’, Macron tells tech giant CEOs

Updated 24 May 2018
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‘There is no free lunch’, Macron tells tech giant CEOs

PARIS: President Emmanuel Macron told executives from the world’s biggest technology firms on Wednesday that he wanted innovation to be a driving force for the French economy, but also that they needed to contribute more to society.
The French leader paints himself as a champion of France’s plugged-in youth and wants to transform France into a “startup nation” that draws higher investments into technology and artificial intelligence. He is also spearheading efforts in Europe to have digital companies pay more tax at source.
Macron’s guest-list included Facebook Inc. Chief Executive Mark Zuckerberg, IBM’s Virginia Rometty, Intel Corp’s Brian Krzanich, Microsoft Corp’s Satya Nadella and a raft of other big hitters in the corporate world.
“There is no free lunch,” he quipped in English to the executives lined up on the steps of the Elysee Palace for a photo call at a lunch meeting. “So I want from you some commitments.”
As Macron spoke, IBM announced it would hire about 1,400 people in France over the next two years in the fields of blockchain and cloud computing.
Ride-hailing app Uber also said it planned to offer all its European drivers an upgraded version of the health insurance it already provides in France in a drive to attract independent workers and fend off criticism over their treatment.
Macron will hold one-on-one talks with Mark Zuckerberg on tax and data privacy on the sidelines of the Tech For Good summit — a day after the Facebook chief executive faced questions from European Union lawmakers.
Those talks will be frank, an Elysee official said ahead of the meeting. While Macron will be pitching France Inc, he will also push his case for a European Union tax on digital turnover and a tougher fight against both data piracy and fake news.
Zuckerberg on Tuesday sailed through a grilling from EU lawmakers about the social network’s data policies, apologizing to leaders of the European Parliament for a massive data leak but dodging numerous questions.
Macron told the executives that business needed to do more in tackling issues such as inequality and climate change.
“It is not possible just to have free riding on one side, when you make a good business,” the French president said.