| 10 Apr 2008 |
|
Real Estate Prices Rise Up to 90% in Riyadh
- Text size
JEDDAH, 10 April 2008 -- Real estate prices in Riyadh have increased by 40 to 90 percent in recent months, but analysts said property prices in the Kingdom were still the lowest compared to neighboring GCC countries.
The analysts attributed the increase in prices to growing demand for real estate following repatriation of Saudi funds from abroad. Many Saudis favor real estate being a secure investment.
The price for a square-meter of land in the capital ranges between SR400 and SR4,000 while building costs range between SR1,000 and SR2,500 per square meter, Al-Eqtisadiah Arabic daily said. "Many Saudis have shown interest in real estate lately following recurrent fluctuations in the Saudi bourse," one analyst said.
Suleiman Al-Amri, chairman of a real estate company, said he believed that real estate prices in the Kingdom were much lower compared to neighboring countries. "This indicates that real estate prices in the Kingdom are still normal," he added.
Al-Amri spoke about growing prospects for investment in real estate in Riyadh as 70 percent of Saudis living in the city still do not own a house. "This situation will increase demand for real estate for building houses," he added.
He also called for suitable solutions for housing problems in the country. "Rules and regulations should support investment in the sector," he added.
Al-Amri said prices of real estate in some areas of Riyadh have increased by 90 percent. "This is really frightening."
He stressed the need for more companies to build housing units. "Many people are still seeking villas and flats instead of purchasing land," he pointed out.
Abdul Aziz Al-Jaad, a member of the real estate committee at the Riyadh Chamber of Commerce and Industry, also agreed that real estate prices in the city were rising gradually as a result of demand.
"Real estate owners are now selling land to developers rather than individuals," he said.
Ali Al-Fowzan, director general of a real estate office, said there is big demand for real estate to construct houses, offices and other projects. "The increase in real estate prices could be found all over the Kingdom, not in Riyadh alone," he said and cited increasing liquidity as one of the major reasons for price hikes. The hike in real estate prices has also reflected in rents for offices in Riyadh and other parts of the country.
Many small businesses have been closed down as a result of a 35 percent increase in rents as their owners thought it was better to close than suffering losses.
Many traders have protested the high increase in rents but Khaled Al-Salman, a real estate developer in Jeddah, defended the move, saying construction cost had gone up 25 percent. He expected more demand for showrooms and office rooms.
Saad Al-Abdullatif, owner of a computer repair shop in Dammam, said he decided to close his present shop when the real estate owner increased rents from SR25,000 to SR32,000. "I am now looking for another showroom at a lesser rent."
By P.K. Abdul Ghafour
© Arab News 2008
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Loading ...
Post a Comment
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.