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The number of residential properties sold in Saudi Arabia fell by 19.9% in the second quarter of 2022, but the total value of properties sold increased by 21.4% to SAR 36 billion ($9 billion), according to a new report.
Riyadh saw the sharpest fall in the number of property transactions in the year to Q2 2022, as the total number of transactions fell by 33.1% compared to the second quarter of 2022, real estate services company CBRE said.
The Q2 real estate market review for Saudi Arabia in the second quarter revealed that the number of mortgage contracts issued by banks in the kingdom decreased by 20.9% over the same period, with the value falling by 17.7% to SAR 67.4 billion.
As at June 2022, of the total value of mortgages provided to individuals by banks, single-family residences, apartments and land accounted for 71.7%, 24.1% and 4.1% of total lending respectively, the report said.
Average apartment prices per square metre in Saudi Arabia have increased by 6.2% in the year to Q2 2022. In individual cities, apartment price increases were 11.3% in Khobar, 5.0% in Jeddah, 4.2% in Riyadh and 4.1% respectively, the report said.
Regarding the commercial real estate market, CBRE said visitation to workplaces in Saudi Arabia was 19.3% above the pre-pandemic baseline, with the Eastern province the highest at 20.3% above baseline.
Activity in Saudi Arabia’s office market remains focused on Riyadh, where demand continues to significantly outstrip supply, the report said.
Average occupancy levels have risen over the last quarter by 0.7 percentage points to reach 98.1% in Q2 2022, where average Grade A and Grade B occupancy levels stood at 98.6% and 97.6% respectively.
“Constrained supply levels have also continued to support growth in rental rates, where in the year to Q2 2022, average Grade A and Grade B rents increased by 3.9% and 4.2% respectively,” the report said.
In the hospitality sector, the average occupancy rate in the year to date to June 2022 increased by 19%, with the average daily rate (ADR) increasing by 13.5%, and, revenue per available room (RevPAR), on average, increasing by 72.8%.
The overall occupancy rate is 5.1% below pre-pandemic levels, the report said.
(Writing by Imogen Lillywhite; editing by Seban Scaria)
