Saudi government focus on balancing growth, stability to drive property market - JLL

Demand for KSA’s residential properties remained active in 2020, given the strong government support for the sector

  
Buildings at the King Abdullah Financial District in Riyadh, Saudi Arabia.

Buildings at the King Abdullah Financial District in Riyadh, Saudi Arabia.

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Riyadh –  Saudi Arabia last year remained focused on growth and stability, long-term economic sustainability, diversification, and an enhanced quality of life for its people while much of 2020 prioritised the response to Covid-19.

This was evident in the SAR 990 billion (264 billion) budget for 2021, which underpinned health and social development, and education spending, with each allocated SAR 186 billion and SAR 175 billion, respectively, according to JLL’s KSA 2020 Year in Review report.

“Even though there are sectors in KSA’s property market which remain challenged as a result of COVID-19, the government is looking beyond the implications of the pandemic by continuing to support a number of measures and by investing massively in various projects to achieve its Vision 2030 goals,” Head of Research MENA at JLL, Dana Salbak, said.

Demand for KSA’s residential properties remained active in 2020, given the strong government support for the sector. Construction activity remained active as well.

The office sector witnessed muted activity across Jeddah, Makkah, Riyadh, and Dammam Metropolitan Area (DMA), whilst construction activity on office developments slowed down. Going forward, corporates are projected to continue integrating and optimising a hybrid working model to ensure their employees' safety.

The retail sector saw an immediate impact from the coronavirus, with the lockdown measures imposed limiting retail centre visitation, among other factors such as the tripling of the value-added tax (VAT). This resulted in lower footfalls and in-store revenues.

The hospitality industry in Saudi Arabia, like global markets, saw the brunt of Covid-19, with travel restrictions affecting business, leisure, and religious tourism. Hotels in Jeddah and Makkah recorded the lowest occupancy levels in the YT November 2020, placing downward pressure on performance metrics.

Source: Mubasher

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