Prices of apartments in Riyadh have risen by 20 percent over the last year; however, demand could now be stymied by households having to save for longer before making the transition from renting to owning, according to Knight Frank.

 According to the leading real estate consultancy in Saudi Arabia, growth in prices was “spectacular” but the number of deals had fallen by 27 percent in Riyadh in the last 12 months.

Faisal Durrani, Partner – Head of Middle East Research at Knight Frank, explained: “The spectacular house price growth in the kingdom mirrors what we are seeing around the world.

“However, in Saudi Arabia, the government’s programmes to boost home ownership have turbo-charged demand, development activity and house prices.”

Knight Frank data showed transaction volumes across Saudi Arabia fell to 60,000 during Q1. Total deal values only reduced by two percent to SAR 40.4 billion ($10.77 billion).

As Riyadh has been repositioned as the kingdom’s economic hub, younger Saudis are relocating to the city to take advantage of job opportunities, Knight Frank noted.

Knight Frank said the new residents were “semi-transient”, showing preference for apartments over villas and renting over buying, with vendors responding accordingly by holding firm on price or turning to renting instead of selling. 

 (Writing by Imogen Lillywhite; editing by Seban Scaria)