Saudi Arabia has made moves towards more transparency in its real estate market but is still behind Dubai and Abu Dhabi in the region, when it comes to real estate transparency rankings, global real estate and investment management firm JLL said.

On the Global Real Estate Transparency Index (GRETI) developed by JLL, Saudi Arabia is ranked 57th, while Dubai and Abu Dhabi are ranked 36th and 48th respectively.

In its report, The Global Real Estate Transparency Index, a Middle East & North Africa Perspective, JLL said: “Conscious of the role data plays in market transparency, the Saudi government rebranded its publicly available central database - The General Authority for Statistics – and has continued to collate more data from government agencies. Ministries and government organisations such as the Ministry of Finance and the Saudi Arabian Monetary Authority have also begun to publish more micro-level indicators on a monthly and quarterly basis.

Overall however, the region has seen transparency levels decline from 2018, the report said.

“Data from the Ministry of Justice has also become a valuable indicator for commercial and residential real estate transactions and performance.”

London, UK, ranked first, while Oman was the only Gulf state to fall into the ‘Opaque’ category, ranking 81 out of 99 countries ranked.

Tunisia, Lebanon, Algeria, Iraq and Libya were the MENA countries that also fell into the JLL Opaque category.

JLL also highlighted Saudi Arabia’s progress towards the digitisation of the country, which also stems from its commitment to diversify its economy away from the hydrocarbon sector.

“The National Strategy for Digital Transformation in the Kingdom aims to adopt telecommunications and information-communication technologies (ICT) in order to facilitate the transformation towards a knowledge-based economy,” the report said.

The Saudi Arabian government’s decision to exempt property deals from 15 percent VAT and replace it with a new 5 percent tax on transactions will maintain momentum in the residential mortgage sector, according JLL.

In its Q3 2020 performance report on the Saudi real-estate market, JLL outlined the government’s decision to also scrap the 5 percent tax for properties worth up to SAR 1 million ($267,000) for first-time homebuyers with the objective of increasing home ownership, a key target of the kingdom’s Vision 2030.

(Writing by Imogen Lillywhite; editing by Seban Scaria)

(imogen.lillywhite@refinitiv.com)

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