RIYADH: The prices of apartments in Saudi Arabia is growing at the fastest rate in five years, according to a new study from property consultant firm Knight Frank.
Knight Frank highlights in its report today that Riyadh and Jeddah have seen apartment values accelerate by 17 percent and 12 percent respectively over the last 12 months.
Faisal Durrani, head of Middle East Research at Knight Frank, said: “The government’s drive to boost home ownership rates began in 2016, however house prices only began accelerating in 2019. And in fact, apartment prices in Riyadh have increased by 14.4 percent since 2019."
Sakani and Wafi schemes have seen 160,000 households benefit during the first half of 2021, according to Durrani.
Villa price growth is starting to slow, but "they can still cost anywhere between 7-12 times annual incomes,” Durrani said, adding: "Home ownership has actually become more affordable since the launch of the National Transformational Plan."
The Kingdom is set to have a new residential landscape, where it is now also more culturally acceptable for a family to buy an apartment as their first home.
The demand for single-person dwellings is likely to accelerate in Riyadh with the job creation acceleration leading to a shift in the market's demand dynamics, according to Durrani.
The Kingdom will have a limited supply pipeline, which is expected to add 730,000 homes to Riyadh by the end of 2030, reflecting a shortfall of at least 420,000 homes, despite shifting demand-supply dynamics and affordability issues for larger homes.
Jeddah’s residential market has seen apartment prices surge by 11.7 percent over the last 12 months- the strongest growth rate in at least five years while villa prices have risen by just 1.3 percent over the same period.
Average apartment prices in the Dammam Metropolitan Area (DMA) have risen by 5.5 percent in the year to the third quarter of 2021, while average villa prices have declined by 1.9 percent over the same period.