Jeddah property outlook ‘positive’ despite fall in prices

While Jeddah has a relatively low level of home ownership due to ‘affordability constraints,’ the trend is shifting. (Shutterstock)
Updated 15 April 2019
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Jeddah property outlook ‘positive’ despite fall in prices

  • The Saudi city is expected to receive an additional supply of around 20,000 residential units in 2019–2020
  • Jeddah’s hospitality market is likely to witness the delivery of more than 4,000 hotel keys in the coming two or three years

LONDON: The long-term outlook for Jeddah’s property market is “positive” despite a 6 to 8 percent drop in sale prices last year, according to a report by KPMG.
The Saudi city is expected to receive an additional supply of around 20,000 residential units in 2019–2020, an addition of 2.5 percent to the current stock of about 810,000, the report found.
“Despite the current slowdown in the market and subdued performance during the last couple of years, the market drivers seem to be positive for the long term, backed by the favorable demographic, and government’s focus on the real estate sector as part of the diversification process,” said Firas Hassan, head of real estate at KPMG Al Fozan & Partners, the Saudi Arabia-based audit firm that prepared the report.
The report pointed to the Saudi government’s aim to increase home ownership from 47 percent to 70 percent by 2030.
While Jeddah has a relatively low level of home ownership due to “affordability constraints,” the trend is shifting, the report found.
“The market is witnessing a shift in the trend as a proportion of the middle-income housing units are significantly increasing in the forthcoming supply. Most of these developments are located toward the northern side of the city,” said Hassan.
The most expensive apartments for sale are located toward the western side, with prices between SR5,000 ($1,333) and SR6,500 per square meter, the report said.
“While the demand for apartments and small-sized villas/duplexes is expected to remain high, the residential community concept (semi-gated complexes) is getting market acceptance,” it added.
In the retail property sector, KPMG said there were “signs of stability” last year after a period of “subdued performance.”
“Jeddah’s retail market is benefiting from a high population base, elevated disposable income, and changing lifestyle. We expect demand for quality retail space to continue rising,” the report found.
“However, retail operators need to implement new methods that combine shopping with entertainment to attract more footfalls to their space.”
Jeddah’s hospitality market is likely to witness the delivery of more than 4,000 hotel keys in the coming two or three years, which will increase the current hotel stock by 35 percent, the report added.


Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

Updated 19 June 2019
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Paris Air Show: After Boeing showstopper, Airbus seeks order bounce

  • British Airways owner IAG signs letter of intent to buy 200 of its 737 MAX jets
  • Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes

PARIS: Airbus, reeling from the potential loss of a major customer for its best-selling A320neo as British Airways owner IAG placed a lifeline order for the grounded 737 MAX, prepared to hit back with more orders for its A321XLR on Wednesday.
The planemaker has been negotiating with US airlines investor Bill Franke whose Indigo Partners has also been known to place orders for multiple airlines within its portfolio and could reel it in for the Paris Air Show, industry sources said.
Airbus declined to comment.
After weathering intense scrutiny over safety and its public image, Boeing won a vote of confidence on Tuesday as IAG signed a letter of intent to buy 200 of its 737 MAX jets that have been grounded since March after two deadly crashes.
The surprise order lifted the energy of a previously subdued Paris Airshow, where the talk had been of the possible end of the aerospace cycle, given the issues at both Boeing and Airbus as well as geopolitical and trade tensions around the world.
Australia’s Qantas Airways said on Tuesday it would order 10 Airbus new A321XLR jets and convert a further 26 from existing orders already on the Airbus books.
Airbus is also in talks with leasing company GECAS and has been trying to secure an eye-catching order for the A321XLR from American Airlines, though the world’s largest carrier does not typically make announcements at air shows.
Airbus is looking for up to 200 orders for the A321XLR, which is designed to open up new routes.