DAMMAM, 3 July 2003 — The real estate price in the Eastern Province is steadily increasing and estimates are that by the end of the year it may reach a 15-year high. The increase is in both land prices and rents.
According to an estimate, the rents in Dammam and Alkhobar have increased by 12 percent compared to last year while land prices have gone up by 10 percent.
Muslah Al-Shammrany, managing director of Rabih Real Estate Services in Dammam, said prices would continue to rise as there has been a flurry of construction activity around the region.
He said rising land prices had a direct impact on rents. However, he discounted fears that the prices may go up to the level of the early 1980s.
“That was the result of economic boom and the increase was not realistic. As a result the real estate market virtually crashed,” he said. “But now the market has stabilized and the increase is realistic. It is a reflection of the country’s economic growth.”
Al-Shammrany said that the trend was essentially due to the return of capital from abroad. “Many businessmen and investors withdrew their capital from abroad after Sept. 11 and subsequent developments around the world. These investors and businessmen are now investing their capital in the domestic market,” he said.
Real estate agents say that the attack on Iraq did not have any impact on the real estate market. “It didn’t slow down for a single day,” said Abdul Aziz Al-Fares, another real estate agent in Alkhobar.
Al-Shammrany said that the market had matured to the point where such incidents do not have any lasting impact. “Earlier debacles have strengthened the market and made it more realistic and it is quite capable of absorbing such shocks,” he said.
He said he expected a further increase in land prices in the coming months. “But the increase won’t be drastic. It may go up by a further three to five percent.” Rents, he said, would stay at the same level for some time.