Saudi Real Estate: Surge in Residential Sales and Price Trends Across Major Cities | Kanebridge News
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Saudi Real Estate: Surge in Residential Sales and Price Trends Across Major Cities

Saudi Arabia has witnessed significant increases in property sales throughout the kingdom, alongside moderate price escalations in certain urban areas.

Fri, May 31, 2024 4:46pmGrey Clock 4 min

According to CBRE Saudi Arabia‘s Real Estate Market Review for the first quarter of 2024, the residential real estate sector has observed a substantial boost in property transactions.

Sales in Riyadh and Jeddah rose by 77% and 92.9% respectively, marking them as the top performing markets with the most notable price increments. The analysis by the real estate firm also highlighted trends such as increasing office rents, enhanced hotel occupancy, and higher industrial sector leases.

Residential Real Estate

In the residential sector, there is a sustained high demand in the major residential cities of Saudi Arabia.

The initial quarter of 2024 saw Riyadh’s sales transactions escalate by 77% year-on-year. During the same period, Jeddah and Dammam recorded rises in residential transactions by 92.9% and 28% respectively.

Average villa prices in Riyadh, Jeddah, and Khobar saw rises of 3.6%, 0.2%, and 3.1% year-on-year, while Dammam experienced a slight decline of 0.5% by Q1 2024.

In the apartment sector, average prices in Riyadh, Dammam, and Khobar increased by 8.4%, 0.9%, and 0.4%, respectively, compared to the previous year, whereas Jeddah saw a 1.1% decrease.

Taimur Khan, Head of Research CBRE MENA, said: “Whilst we have seen strong performance across commercial sectors within Saudi Arabia in the recent past, something which continues to date, we are now beginning to see the residential sector also register a significant surge in demand.

“This is in turn underpinning performance in the sector. As new stock continues to be delivered, we expect that this trend is likely to continue, with demand expect to outpace supply for some time to come, however we do also expect that there might be some bifurcation in performance within the residential sector, with new quality assets likely to register record rates.”

Office Real Estate

The office sector has seen a moderated growth in rental rates during the first quarter across all segments. Prime rents in Riyadh’s occupier market increased by 14.5% year-on-year.

Taimur Khan, CBRE’s Head of Research MENA in Dubai

Over the same period, average rents within the Grade A segment of the market saw an increase of 11.8%, and average Grade B rents registered a year-on-year increase of 10.3%. As of the first quarter of 2024, the average occupancy rate within the Prime, Grade A, and Grade B segments of the market stood at 93.8%, 99.7%, and 99.4%, respectively.

In the year to Q1 2024, in Dammam, average Grade A rents increased by 8%, and average Grade B rents grew by 6.2%. Over this period, Khobar’s Grade A rents saw year-on-year increase of 4.6%. Headline occupancy rates improved in both cities, where Grade A occupancy rates in Dammam and Khobar stood at 86.3% and 85.2%, respectively, as at Q1 2024. Over this period, the average Grade B occupancy rate within Dammam’s occupier market reached 71.6%.

In the 12 months to Q1 2024, average Grade A and Grade B rental rates in Jeddah saw year-on-year increases of 13.6% and 13.1%, respectively. The average Grade A occupancy rate rose by 0.7% points, while Grade B occupancy rate increased by 7.3% points. Grade A and Grade B average occupancy rates stood at 92.5% and 86.6%, respectively.

Hospitality Real Estate

The hospitality sector maintained robust performance in the first quarter, driven by high visitation levels. There was a marginal year-on-year increase in average occupancy rates by 0.1% points, with the Average Daily Rate (ADR) rising by 11.8%, leading to a 12% growth in Revenue per Available Room (RevPAR).

On a city level, over this period, Riyadh’s average occupancy rate declined by 4.4% points, and its ADR increased by 26.8%, resulting in a rise of 18.9% in the city’s average RevPAR.

Although the average occupancy rate declined by 3.7% points in Madinah, the city’s ADR registered an increase of 20.5%, which led to an increase of 15.2% in RevPAR levels. Makkah’s average occupancy rate marginally rose by 0.4% points, and its ADR grew by 9.1%, culminating in a RevPAR growth of 9.7%. In Jeddah, the average occupancy rate registered an increase of 6 percentage points. The city’s ADR grew by 3.2%, leading to a 13.9% growth in RevPAR levels. Dammam’s average occupancy rate saw an upsurge of 9.1% points while its ADR declined by 3.1% and the city’s RevPAR registered an increase of 13.5%.

In the year to date to March 2024, the average occupancy rate registered an increase of 8.8 percentage points compared to its pre-pandemic baseline, as all tracked cities have surpassed their 2019 levels. Over this period, the country’s ADR stood at 62.3% above its 2019 baseline and, as a result, the average RevPAR outperform the 2019 figure by 85.8%. Saudi Arabia’s Adel Real Estate launches blueprints for giant Dammam development.

Industrial Real Estate

The industrial sector in the first quarter of 2024 highlighted renewed efforts by the Ministry of Transportation and Logistics Services to enhance the logistical infrastructure and services.

Due to the ongoing logistical and industrial reforms, according to the World Economic Forum (WEF), Saudi Arabia scored 5.7 in the Quality of Road Infrastructure (QRI) score, which led to the Kingdom ranking 4th among G20 countries.

In terms of performance, in Q1 2024, Riyadh’s average industrial and logistics rent marked an increase of 8.1% from the year prior.

In Jeddah, in the 12 months to Q1 2024, the average industrial and logistics rent increased by 3.1%. Average industrial and logistics rents within Dammam registered a year-on-year increase of 4.6% in Q1 2024, while Khobar’s industrial and logistics properties recorded a decline of 2.8% in their average rent as at Q1 2024.

 



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AQUA Properties Announces Record Sales for The Central Downtown

The Central Downtown led the market in May, capturing an impressive 40.5% of all transactions in Arjan

Fri, Jun 21, 2024 2 min

AQUA Properties has reached a remarkable milestone by selling over 900 units in its latest project, The Central Downtown, within just 100 days of its launch.

This achievement underscores the robust demand for premium real estate in Dubai, with The Central Downtown leading the market in May by capturing an impressive 40.5% of all transactions in Arjan, as reported by Property Monitor.

Situated centrally in Arjan, this expansive project spans a 7-acre hub, making it the largest development in the community. The Central Downtown consists of four towers featuring modern studios and 1–3-bedroom apartments, along with a 200,000 sq ft podium level offering over 25 amenities.

Residents can enjoy a variety of facilities, including a golf simulator, wave pool, basketball court, outdoor cinema, padel tennis, and an organic farm.

Integrated approach

Additionally, a 150,000 sq ft shopping mall beneath these interconnected towers provides a unique retail convenience. This integrated approach sets The Central Downtown apart, making it the leading choice in Arjan.

AQUA Properties Founder Ali Tumbi said: “This rapid sales success underscores AQUA Properties’ formidable presence in Dubai’s real estate market and highlights the high level of investor confidence in our projects.”

To celebrate the success of The Central Downtown, AQUA Properties, an award-winning multinational real estate brokerage and developer, hosted an exclusive 3-day luxury cruise on the Arabian Gulf in February, bringing together over 300 key investors, brokerage partners, and valued community members. The celebrations continued in April with a groundbreaking event, marking the commencement of this visionary project.

Community trust

Since its establishment in 2005, AQUA Properties has built a strong reputation for excellence. Renowned for its extensive experience and community trust, AQUA Properties has launched its seventh project, The Central Downtown, showcasing its expertise once again.

With nearly two decades of industry experience, AQUA Properties consistently provides exceptional services, ensuring customer satisfaction through competitive pricing, flexible payment plans, and luxurious amenities.

Their impressive portfolio includes projects in prime Dubai locations such as Palm Jumeirah, Jumeirah Village Triangle, and Motor City, among others.

Riding on the success of The Central Downtown, AQUA Properties is poised to dominate Dubai’s real estate market with several upcoming developments this year, including projects in Dubai Sports City, Sheikh Zayed Road, and Arjan. AQUA Properties’ commitment to excellence and innovation continues to shape the future of real estate in Dubai.

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