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.


Iraq parliament approves 2019 budget, one of largest ever

Updated 24 January 2019
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Iraq parliament approves 2019 budget, one of largest ever

  • The budget will be largely funded by oil revenues
  • The 2019 budget is almost 45 percent higher than last year’s budget

BAGHDAD: Iraqi lawmakers on Thursday approved the government’s 2019 budget, which at $111.8 billion is one of the oil-rich country’s largest ever spending bills.
It represents a nearly 45 percent increase from last year and awards even more money for public salaries, including those of the northern Kurdish region.
Nearly 90 percent of the budget comes from oil revenues.
Iraq expects to export 3.9 million barrels per day in 2019, including 250,000 bpd from the Kurdish region, at an average of $56 per barrel.
The current price of crude sits at $63 per barrel.
The deficit is expected to more than double to $23.1 billion, while investments increase to $27.8 billion.
The draft bill was originally submitted to parliament in October but has been fiercely debated since then.
MPs from provinces ravaged by the fight against the Daesh group criticized it for not allocating enough reconstruction funds to their regions.
Another debate raged over the share that would be allotted to the administratively autonomous Kurdish region.
MPs had originally scheduled a session for 1:00 p.m. on Wednesday but delayed it to 7:00 p.m. and voted article by article, finishing just after midnight.
The government proposed $52 billion in salaries, pensions, and social security for state workers — a 15-percent jump from 2018 and more than half the total budget.
Notably, parliament passed a budget measure to fund salaries for the Kurdistan region’s state workers and armed forces, the peshmerga.
The budget also stipulates the Kurdish Regional Government must export 250,000 bpd of crude through state-owned companies and deposit the revenues in federal coffers.
If it didn’t, MP Sarkawt Shamsaddin told AFP, Baghdad would continue to pay salaries but would not disburse other funds to the Kurdish region.
“The good thing is public servants’ salaries and peshmerga are not subject to political disputes,” said Shamsaddin, representing the northeastern Kurdish city of Sulaymaniyah.
Relations between Baghdad and Irbil, the capital of the Kurdish region, soured in 2017 after Kurdish authorities held an independence referendum.
Last year’s budget was approved by parliament in March.
Parliament had also scheduled a vote on two of the five remaining empty cabinet posts in Prime Minister Adel Abdel Mahdi’s government but adjourned without holding it.