Saudi investors keen on real estate and looking abroad

Dubai Marina by night: The UAE is the preferred market for 28 percent of GCC investors. (AFP)
Updated 20 June 2018
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Saudi investors keen on real estate and looking abroad

  • Many Saudis are looking outside the Kingdom for opportunities in the property market, according to a new survey of investment patterns among residents.
  • Some 85 percent of Saudi residents have invested in property at some stage, but over half of respondents are considering putting their cash into international real estate.

DUBAI: Most investors in Saudi Arabia are committed to real estate as their main investment vehicle, but many are looking outside the Kingdom for opportunities in the property market, according to a new survey of investment patterns among residents.

Some 85 percent of Saudi residents have invested in property at some stage, but over half of respondents are considering putting their cash into international real estate, the survey, by market research firm YouGov on behalf of British property developer Select Property Group, reveals.

“Investor confidence is only further evidenced by the frequency in which investments are being made. The results found that almost a quarter (23 percent) of investors based in Saudi Arabia look to make a new investment at least every three months.

“Respondents were asked to consider their previous and potential future investments in bonds, stocks and real estate – both domestically and internationally – as well as mutual funds, bank products, gold and precious metals, cryptocurrency and fine art. Across every category, respondents demonstrated a desire to increase their level of investment in the coming years,” the report said.

 

Despite cryptocurrency being in its relative infancy as an asset, 5 percent of respondents based in Saudi Arabia declared they have already spent over $500,000 in the digital currency, though investment levels collectively still trail far behind more traditional asset classes, such as real estate.

The Saudi Arabian Monetary Authority has warned of the “risky and speculative” nature of crypto-currencies like Bitcoin, while welcoming blockchain as an innovative financial technology.

“The results show that investors in this region are highly motivated and it’s interesting to see the mix of key investment choices among the varying demographics. It’s promising to see that Saudi Arabia residents are also inclined to make regular investments, constantly keeping an eye on the market and looking to capitalize on the latest opportunities,” said Adam Price, managing director at Select Property Group.

Investors in Saudi Arabia and the UAE accounted for the highest proportion of the “very knowledgeable” category in the survey.

In the wider Gulf, most investors looking at overseas property were interested in residential real estate (44 percent) with 27 percent eyeing commercial property.

The UAE is the preferred market for 28 percent of GCC investors, with 16 percent interested in the US and 8 percent naming the UK as their preferred destination. Some 11 percent looked favorably on Turkish real estate.

An earlier version of this story incorrectly stated that the Select Property Group survey found that 1 percent of GCC property investors said the UK was their preferred market. The correct figure is 8 percent. This has been amended in the above text.

FASTFACTS

The Saudi Arabian Monetary Authority has warned investors of the “risky and speculative” nature of crypto-currencies such as Bitcoin.


Saudi Arabia’s 2019 budget boosts spending by 7%

Updated 19 min 59 sec ago
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Saudi Arabia’s 2019 budget boosts spending by 7%

  • Spending projected to hit $295 billion next year
  • Analysts expect ‘gradual’ pickup in non-oil economic growth

RIYADH: Saudi Arabia plans to increase state spending by more than 7 percent in 2019, according to a budget released by the Finance Ministry on Tuesday.

Spending is projected to rise to 1.106 trillion riyals ($295 billion) next year, up from an actual 1.030 trillion riyals this year, Saudi state television quoted the budget as saying.

The move is seen as an effort to boost economic growth, which has been hurt by low oil prices, which have plummeted more than 30 percent since October. 

“We believe that the 2019 fiscal budget will be focusing on supporting economic activity – investment and wider,” Monica Malik, chief economist at Abu Dhabi Commercial Bank (ADCB), told Arab News. 

“The continuation of the handout package will be positive for household consumption by nationals. We expect to see some overall fiscal loosening in 2019, which should support a further gradual pickup in real non-oil GDP growth.”

Malik said the government spending projection in the 2019 budget is in line with earlier official indications. 

A pre-budget statement in September, the first of its kind in Saudi Arabia, predicted next year’s budget would be SR1.11 trillion.

The Kingdom has run a budget deficit since 2014 as a slump in oil prices lowered state income. Saudi Arabia aims to balance its budget by 2023.