In the first quarter of 2024, the real estate sector in Saudi Arabia has experienced a surge in residential property transactions, according global consultancy firm CBRE.
The number of sales transactions registered in Riyadh totalled 23,900, recording a year-on-year increase of 77.0%. The value of residential properties sold over this period stood at SAR 32.7 billion, the real estate analyst company said in its Saudi Arabia Real Estate Market Review Q1 2024.
Jeddah witnessed a 92.9% year-on-year increase in sales transactions, standing at a total of 14,400 while reaching a value of SAR 17.9 billion. Meanwhile, Dammam stood at SAR 3.3 billion, and the number of transactions increased by 28.0% year-onyear to reach 3,044.
“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” Taimur Khan, CBRE head of research MENA, said. “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” he added.
Average villa prices in Riyadh, Jeddah, and Khobar rose by 3.6%, 0.2%, and 3.1% respectively to stand at SAR 5,808, SAR 5,658, and SAR 3,626 per square metre, respectively. On the other hand, Dammam saw a slight decline of 0.5%. Over the same period, in the apartment segment, prices in Riyadh, Dammam, and Khobar increased by 8.4%, 0.9% and 0.4% arriving at SAR 4,939, SAR 2,813 and SAR 3,397 per square metre. However, Jeddah experienced a 1.1% decline in average apartment price as it settled at SAR 3,952 per square.
Looking at the office sector, in Q1 2024, Riyadh’s Grade A offices average rents increased by 11.8% year on year reaching SAR 1,975 per square metre. Average rents for Grade A offices in Jeddah cost SAR 1,406 per square metre after rising by 13.6% year on year. Grade A office in Dammam registered an increase of 8.0% at SAR 1,017 per square metre. Average industrial rents registered upticks across key cities including Riyadh, Jeddah, Dammam at the following rates 8.1%, 3.1% and 4.6%. Khobar’s average industrial rent contracted by 2.8% landing at SAR 231 per square metre.
Additionally, hospitality sector key performance indicators in Saudi Arabia improved overall with average occupancy registering an uptick of 0.1 percentage point and ADR rising by 11.8% resulting in RevPAR registering 12.0% growth in the 12 months to March 2024, the CBRE report said.
