02 Aug 2024
RIYADH: Saudi Arabia’s real estate price index edged up by 1.7 percent in the second quarter of 2024, compared to the same period last year, driven by a surge in residential sector costs, official data showed.
According to the General Authority for Statistics, housing sector prices increased by 2.8 percent year-on-year in the second quarter, mainly due to a 2.8 percent rise in land plot costs.
The development of the residential sector is crucial for Saudi Arabia’s economic diversification as it evolves into a tourism and business hub.
The Kingdom’s real estate industry is among the fastest-growing sectors in the Middle East. Its market volume is projected to reach $69.51 billion in 2024 and $101.62 billion by 2029, with an estimated compound annual growth rate of 8 percent, according to the Real Estate General Authority.
“Given the heavy weight of the residential sector in the general index, it had a significant impact on the rise in the general index,” stated GASTAT.
Apartment prices increased by 2.9 percent year-on-year in the second quarter.
GASTAT, however, noted that the real estate prices in the commercial sector decreased by 0.4 percent year-on-year in the second quarter, affected by the decrease in the prices of commercial land plots by 0.4 percent.
The report highlighted that the prices of commercial buildings and commercial centers stabilized in the second quarter of this year, and no significant relative change was recorded.
Agricultural land plot prices increased by 1.5 percent year-on-year in the second quarter.
Compared to the first three months of this year, the real estate price index surged by 1.1 percent in the second quarter.
“The quarterly real estate index was affected by the rise in residential sector prices by 1.6 percent, influenced by the rise in prices of residential land plots, which rose by 1.6 percent,” said GASTAT.
The prices for apartments increased by 2.1 percent quarter-on-quarter in the second quarter, while the purchasing costs of villas edged up by 0.1 percent.
The prices of the commercial sector recorded stability and did not record any significant relative change in the second quarter compared to the first three months.
Agricultural land prices rose by 1.6 percent in the second quarter compared to the first quarter.