The half-yearly survey released on Monday — which covers Makkah, Riyadh, Jeddah and the Eastern Province cities of Dammam, Alkhobar and Dhahran — shows a broad acceleration in asking sale and rental prices for apartments, villas and plots of land in the Kingdom.

Large apartment prices across the biggest Arab economy climbed 4.7 percent in the second half of the year while smaller apartments gained 8 percent, the survey report said. Residential land plots rose 8.3 percent.

With a population of 27 million, 70 percent under the age of 30, Kingdom needs to build one million housing units to meet 80 percent of expected demand over the next four years.

Villa sale prices have jumped across the country, including median gains for small villas at 19 percent in Riyadh and 17.1 in Jeddah since the first half of the year (H1).

Median residential land prices rose 8.3 percent across the Kingdom, while plot prices jumped 10 percent or more in Alkhobar and Dammam.

Apartment sale prices climbed moderately in all 12 areas surveyed, with asking prices returning to 2008 levels in Riyadh after 2009 drops.

Rents for large apartments have gone up by median 8.1 percent since H1. Villa rents have risen almost 10 percent and office rents climbed for the first time in two years.

Saudi Arabia has been, for years, working on a mortgage law to make home ownership more affordable for its young population. But the law, which was expected to come out this year, has been delayed.

“Anticipation that a long awaited mortgage law will be introduced by the first quarter of 2011 has energized demand for land and finished properties as buyers hope the regulatory framework will unleash pent-up demand in the coming years,” the report said.

In addition to large demand by the 18 million locals, an increase in the number of expatriates in the country have contributed to a rise in residential rent costs, a trend that is expected to continue.

Median villa rent prices climbed almost 10 percent while large apartment rents rose by 8.1 percent in the second half, the survey said.

“Rising rents have been a key driver of historically high consumer price inflation... and the pressures are unlikely to let up. Following a dip in home rental rates in the first half of this year, survey findings indicate that rents are accelerating quite quickly in the Kingdom,” the report said.

Office rents and commercial land plots also increased, although to a lesser degree than the residential units.

Average annual office rents climbed 2.6 percent in the second half of this year, but are still 20.4 percent from a year ago, while the cost of commercial land plots rose by 1.6 percent according to the median, the survey showed.

— With input from agencies