| 29 Aug 2010 |
|
Saudi Arabia: Real Estate Returns To Growth As Developments Gain Pace
- Text size
Oxford Business Group explores challenges facing sector as mortgage law looms
Saudi Arabia 29 August 2010: Real estate prices are on the rise in parts of Riyadh and Jeddah as Saudi Arabia's growing population drives up demand for residential properties, according to research undertaken by the Consulting Division of Oxford Business Group (OBG).
Rakesh Kunhiraman, Dubai-based Director of OBG's Consulting Division, said the growth witnessed in prime and emerging localities of the cities marked a turnaround for the Kingdom's two key real estate markets. The economic downturn had pushed down prices, while Jeddah also had to contend with further fall-out from the flash floods which hit the city late last year.
"Figures indicate that both cities are earmarked for tremendous growth, especially in prime residential districts and new growth areas in the north of Riyadh and Jeddah," he said. "We also expect low-cost housing, such as multi-storey apartments, to gain prominence during the coming years as the Kingdom's rapidly growing population stretches demand to an estimated 1.5mn new units by 2015."
Kunhiraman said that the districts of Al Masiaf, Al Muruj, Al Mursalat and Al Ghadir, which are situated to the north of Riyadh's Central Business District (CBD), were generating interest among buyers, while the localities to the north of Jeddah, including the corridor close to the Corniche, were earmarked for growth.
"Riyadh's development has shifted towards the northern district due to high land prices coupled with limited availability in the core CBD areas of the city," he said. "The market is now showing gradual signs of recovery, particularly in prime residential districts which have witnessed a rise of 3% in sale prices during the past 12 months."
Kunhiraman said that prices in Jeddah's sought-after Corniche were being kept steady following the construction of a number of high-rise luxury apartments in the area.
"The northern districts of Al Andalus, Al Basateen, Al Hamra'a, Al Khalidiyah, Al Mohammediyah, Al Nahda, Al Nayeem, Al Rawdah, Al Salamah, Al Shatee and Al Zahraa are proving popular thanks to their proximity to the Corniche and this trend is extending towards the northern corridor," he said.
While some localities in the south and east of Jeddah have experienced a slight fall in prices, Kunhiraman said he still expected these areas, which are dominated by low and middle-income residents, to influence growth in the sector.
As the sector awaits news on the introduction of Saudi Arabia's new mortgage law, speculation continues to mount about whether supply will be able to meet demand when the legislation is introduced, especially in the affordable housing segment.
Like many observers, Kunhiraman believes the disproportionately large number of residential units earmarked for high-income buyers will emphasise the imbalance in supply once the mortgage law is introduced. "Most new developments are targeting the high-income segments of the population which constitute a relatively small share of existing demand," he said. "This points to a severe shortfall in supply in the low to mid income segment."
-Ends-
About Oxford Business Group
Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic and political intelligence on the markets of the Middle East, Africa, Asia, Eastern Europe and the Caribbean. Through its range of print and online products, OBG offers comprehensive and accurate analysis of political, macroeconomic and sectoral developments, including banking, capital markets, insurance, energy, transport, industry and telecoms.
OBG's consulting practice specialises in high value research for corporate, NGO and governmental clients, handling a wide variety of assignments ranging from economic research to market studies, risk surveys and financial analysis. OBG's consulting projects are staffed internally, using consultants with substantial regional and industry experience. The company's extensive in-house library and database resources allow the team immediate access to a host of demographic, economic and industry information on the markets that OBG covers.
For more information please contact:
Oxford Business Group
Kate Taylor
PR Manager
Phone: +971 44 264 642
E-mail: ktaylor@oxfordbusinessgroup.com
Dubai, PO Box 502 659, Dubai, UAE
© Press Release 2010
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.