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.


US wins WTO ruling against China grain import quotas

Updated 19 April 2019
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US wins WTO ruling against China grain import quotas

GENEVA: The United States won a World Trade Organization (WTO) ruling on Thursday against China’s use of tariff-rate quotas for rice, wheat and corn, which it successfully argued limited market access for US grain exports.
The case, lodged by the Obama administration in late 2016, marked the second US victory in as many months. It came amid US-China trade talks and on the heels of Washington clinching a WTO ruling on China’s price support for grains in March.
A WTO dispute panel ruled on Thursday that under the terms of its 2001 WTO accession, China’s administration of the tariff rate quotas (TRQs) as a whole violated its obligation to administer them on a “transparent, predictable and fair basis.”
TRQs are two-level tariffs, with a limited volume of imports allowed at the lower ‘in-quota’ tariff and subsequent imports charged an “out-of-quota” tariff, which is usually much higher.
The administration of state trading enterprises and non-state enterprises’ portions of TRQs are inconsistent with WTO rules, the panel said.
Australia, Brazil, India, and the European Union were among those reserving their rights in the dispute brought by the world’s largest grain exporter.
In a statement, US Trade Representative Robert Lighthizer and Secretary of Agriculture Sonny Perdue welcomed the decision, saying China’s system “ultimately inhibits TRQs from filling, denying US farmers access to China’s market for grain.”
If China’s TRQs had been fully used, $3.5 billion worth of corn, wheat and rice would have been imported in 2015 alone, it said, citing US Department of Agriculture estimates.
The two WTO rulings would help American farmers “compete on a more level playing field,” the USTR statement said, adding: “The (Trump) Administration will continue to press China to promptly come into compliance with its WTO obligations.”
The latest WTO panel said that the United States had not proven all of its case, failing to show that China had violated its public notice obligation under the General Agreement on Tariffs and Trade (GATT) in respect to TRQs.
China’s Ministry of Commerce said in a statement on Friday it “regrets” the panel’s decision and that it would “earnestly evaluate” the panel’s report.
China would “handle the matter appropriately in accordance with WTO dispute resolution procedures, actively safeguard the stability of the multilateral trading system and continue to administer the relevant agricultural import tariff quotas in compliance with WTO rules,” it said.
Either side can appeal the ruling within 60 days.