Real estate activity, with its last weekly transactions in the month of Ramadan and before the blessed Eid al-Fitr holiday, recorded a decline of 7.9 percent, so that the total value of weekly real estate transactions settled at the end of last week at the level of 3.1 billion riyals, affected to a greater degree by the record decline of the commercial sector, which The value of its weekly deals recorded a record decrease of 35.3 percent, compared to an increase in the value of deals in the residential sector by 6.7 percent, in addition to an increase in the total value of deals in the agricultural and industrial sectors by a record rate of 41.5 percent.
In view of the performance of the local real estate market over the past weeks, the market has not been able to get out of the grip of seasonal pressures since the beginning of the blessed month of Ramadan, which in turn perpetuated the state of stagnation that the market has been going through since the middle of last year, and continued until the current period. The market is in its tenth consecutive month of stagnation, as a result of many of the fundamental factors that have already been mentioned previously, the most prominent and influential of which is the high interest rate “mortgage cost” and its continuation at its highest levels in more than two decades, in addition to the decline The high levels of real estate lending granted to individuals more than eight consecutive months ago, and to these factors was added finally during the past two months the start of work on the new matrix mechanism for housing subsidies, which in turn reduced the volume of housing subsidies by rates ranging between 70 and 80 percent.
Weekly performance indicators
The real estate market activity decreased by 7.9 percent, and the total value of the market’s weekly transactions settled at the level of 3.1 billion riyals, affected to a greater degree by the record decline of the commercial sector, which reached 35.3 percent, and as a result it settled at the level of 0.9 billion riyals “30.6 percent of the total value of weekly deals in the real estate market.” While the value of deals in the residential sector increased by 6.7 percent, it settled at the level of 1.6 billion riyals, “52.9 percent of the total value of weekly deals in the real estate market,” and the total value of deals also increased. The agricultural and industrial sectors increased by a record 41.5 percent, bringing the total value of deals in the two sectors to 506 million riyals, “16.6 percent of the total value of weekly deals in the real estate market.”
As for the weekly performance level for the rest of the other indicators of the local real estate market, the number of real estate transactions recorded a weekly increase of 3.4 percent, and settled below the level of 3.1 thousand transactions. The number of properties sold increased by a slight rate that did not exceed 0.6 percent, and the volume of weekly sales to the market stabilized at the level of 3.1 thousand sold properties. The total area of real estate transactions executed during the week increased by 25.9 percent, and the total area stabilized at the end of last week at 21.9 million square meters.
Inflation and housing rents by types of real estate and cities – March 2023
The latest publications of the General Authority for Statistics at the end of last March showed that the inflation rate slowed down to 2.7 percent, compared to its rate during the previous month of about 3 percent, while it recorded a monthly increase of 0.1 percent compared to its level during February. The largest inflation rate came in the category of housing, water, electricity, gas, and other fuels, which recorded an annual increase of 7.4 percent, “constituting 25.5 percent as a relative weight in the inflation rate,” followed by the category of restaurants and hotels, with an annual increase of 6.3 percent. It constitutes 5.6 percent as a relative weight in the inflation rate. As for reading the quarterly rate movements, the quarterly inflation rate for the first quarter of this year slowed down to 3 percent, compared to its level during the fourth quarter of last year, which was 3.1 percent, and was higher than its level during the same quarter of the year. past 1.6 percent
Among the most important items of inflation, the index of paid housing rent recorded its annual increase for the 13th consecutive month, by 8.7 percent, and it recorded a monthly increase compared to the previous month by 0.4 percent. As for rents paid for housing according to the type of rented property, the cost of renting apartments was the highest, at an annual rate of 22 percent, followed by the cost of renting villa floors at an annual rate of 9.1 percent, followed by the cost of renting villa floors at an annual rate of 9.1 percent. The rent of popular houses increased at an annual rate of 6.9 percent, and the cost of renting villas came at an annual rate of 5.3 percent. As previously mentioned, it was remarkable that the increase in the cost of rents accelerated during the last few months, in conjunction with the real estate market entering a state of continuous stagnation for more than nine months ago, which in turn requires the importance of researching the reasons that prompted it to rise over Despite the recession that has dominated the market to date, and the results of that study came out with solutions that alleviate the living pressures resulting from these rapid rises.
As for the cost of actual rents for housing by city, the city of Jeddah continued to rank first in terms of the annual increase in the cost of actual rents for housing at an annual growth rate of 24.5 percent, followed by the city of Riyadh, with an annual increase in the cost of 12.6 percent. Then the city of Hail, with an annual increase of 3.3 percent, then the city of Abha, with an increase of 2.1 percent, then the city of Sakaka, with an increase of 1 percent, then the city of Dammam, with an increase of 0.6 percent, and finally Makkah Al-Mukarramah, with an increase. did not exceed 0.4 per cent. While the rest of the other cities, “nine cities”, recorded annual rates of decrease in the cost of actual rents for housing, the lowest rate of decline was in the city of Hofuf by 0.5 percent, while the largest rate of decline was in the city of Najran by 4.7 percent.
