PHOTO
Riyadh – The recent move by Saudi Arabia’s government to exempt property deals from 15% VAT, and instead impose a new 5% tax on transactions, is expected to maintain momentum in the residential mortgage market, outlined JLL’s Q3 KSA real estate market performance report.
In another move expected to encourage first time home buyers and support the Vision 2030 goal of increasing homeownership to 60% by the end of 2020 and 70% by the end of 2030, the government has also scrapped the tax from first-time home-buyers of properties worth up to SAR 1 million.
“In addition to the positivity injected by the recent government measures, the residential sector also showed strong construction activity in Q3 2020 with around 10,000 units handed over in Riyadh and Jeddah. This brings the total residential supply to 1.3 million and 834,000 in Riyadh and Jeddah respectively,” said Dana Salbak, Head of Research for JLL MENA.
“Looking ahead, residential rental rates in the Kingdom are expected to remain under pressure in the short-to-medium term, namely on the back of wider macroeconomic factors such as the growth in unemployment rates, and consequent contraction in household incomes,” she added.
The office sector continued to see downward pressure across Saudi Arabia, with Riyadh, the commercial hub, continuing to perform better. That said, the third quarter of 2020 saw the highest number of office space deliveries in the year, with four projects added to the office stock in Riyadh, bringing the total supply of office GLA to 4.4 million sq m.
The retail market saw mall operators and owners continue to retain their tenants and maintain their quarterly average rental rates through incentives such as rent free periods and temporary discounts. In the short term, it is expected to remain under pressure as more supply enters the market, thus, intensifying competition.
Meanwhile, in light of the agreement between the Tourism Development Fund and local banks to finance SAR 160 billion of tourism projects, in line with Vision 2030, the Kingdom’s hospitality market is expected to witness improved infrastructure, as well as an increase in the number of hotel rooms and construction activity.
– Ends –
Media contacts:
Medha Sandrasagara
Enya Barry
Phone: + 971 4 426 6999
Email: Medha.Sandrasagara@eu.jll.com
JLL@fourcommunications.com
About JLL
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities.
JLL is a Fortune 500 company with annual revenue of $18.0 billion, operations in over 80 countries and a global workforce of more than 94,000 as of March 31, 2020. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.
About JLL MEA
Across the Middle East and Africa (MEA) JLL is a leading player in the real estate and hospitality services markets.
The firm has worked in 35 countries across the region and employs over 900 internationally qualified professionals across its offices in Dubai, Abu Dhabi, Riyadh, Jeddah, Al Khobar, Cairo, Casablanca and Johannesburg www.jll-mena.com
© Press Release 2020
Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
