An official report issued recently set the value of real estate deals in Riyadh at SR12 billion for an area of 19 million sqm involving 5,519 transactions.

According to the real estate index issued by the Ministry of Justice in Riyadh, 931 commercial real estate deals were made in August and September at a value of SR6 billion on an area of 5.8 square meters.

A report drafted by Century21 earlier said that the residential real estate market in Riyadh, the biggest capital in the Gulf, has been short of supply for years. The government has taken dramatic steps to provide housing at affordable prices.

“Nonetheless, a big gap between supply and demand still prevails in the medium and long term,” said the report.

This gap is driving up prices, which makes house ownership out of reach for most Saudi youths.

However, the report said the residential real estate market in Riyadh witnessed strong growth in the first quarter of 2013, where an increase in the price of apartments and villas was steady despite increased demand.

Factors that influence demand on residential units include elements such as the ratio of young people to the total population, the growth of population in the country, the trend toward urbanization and increased per capita income.