‘Property demand to fall 30% due to raids’

‘Property demand to fall 30% due to raids’
Updated 07 November 2013

‘Property demand to fall 30% due to raids’

‘Property demand to fall 30% due to raids’

The demand for retail and office space will fall by 30 percent within the next few months because of government’s labor raids, according to property agents and experts.
The effect on the residential property market would become clear after three months, they reportedly said.
Hamad bin Ali Al-Shuweir, chairman of the national real estate committee at the Council of Saudi Chambers of Commerce and Industry, said most illegal workers are not bound by contracts for residential property, which means there would be little impact on this part of the market.
Abdullah Al-Magluth, a researcher and property expert, said that government’s labor campaign would largely affect commercial property. He estimates the demand would fall by 30 percent.
He said many stores around the country have closed down and been put up for sale, while others have closed temporarily while workers wait for their new work permits.
“The correction of the status of foreign workers will have a positive outcome, but there will be a negative impact on the commercial real estate sector by reducing demand for shops and flats,” Al-Magluth said.
He said legal and illegal expatriates have taken up a large portion of commercial and residential property in the Kingdom. He said property prices would fall over the long term, resulting in many attractive and competitive offers for consumers.
Al-Magluth said there was likely to be a “big correction” in residential property prices, which have soared over the past few years.
Al-Waleed Al-Zoman, a specialist in real estate management, said the effect on the residential property market would be known in about three months.
Shator Abu Magid, a property management specialist, said the rental market would remain stable because many legal expatriates, including academics, engineers, physicians and accountants, have contracts for homes either personally or through their companies.