DAMMAM, 5 October 2003 — Real estate prices in the Eastern Province are increasing at the rate of 6 percent and predictions are that this might reach 10 percent by the beginning of next year. This analysis emerged at the Real Estate and Housing Exhibition 2003 at Dhahran Exhibition Center here, which ended here on Friday.
The exhibition showed that the upward trend in real estate was a GCC-wide phenomenon and property was costliest in the UAE and Saudi Arabia. Participants agreed that — unlike the boom in the late 70s — the real estate surge was more realistic and was going to persist. From the mid-70s real estate prices in the Kingdom shot up and reached their peak in 1980 but crashed in the early 80s and reached their all-time low before Aug. 2, 1990.
Experts say the bubble will not be repeated, though they are not ruling out minor fluctuations. “The market is buoyant and construction activity is at its peak,” said Hassan ibn Othman, the owner of one of the largest real estate groups in the region.
Moqbil Al-Shamranny of Al-Shamranny Real Estate said the flow of capital was increasing and as a result real estate prices were bound to go up. “Millions and millions of riyals have been pumped into real estate. Many businessmen consider it as a safe investment,” he said, adding that all the capital withdrawn from America and Europe in the aftermath of Sept.11 has been invested in the Kingdom’s market, a major portion of it in real estate.
Another reason for the increase in real estate price is growing activity in the tourism sector. Many businessmen in the Eastern Province and elsewhere in the Kingdom are taking an interest in tourism, and as a result several large projects are planned.