Lower rates for commercial real estate boost real estate market in Hijri district

MOSCOW: The value of real estate transactions in the first three months of the Hegirian year 1443 increased by 1.9% compared to the same pre-pandemic period in 1441.
The total value of real estate transactions reached SR 48.2 billion in the quarter ending November 5, compared to SR 43.2 billion and SR 47.3 billion in the first quarter of 1442 and 1441, respectively, according to the reports. data from the Ministry of Justice.

The growth in 1443 was driven mainly by the commercial sector which increased by almost 80 percent to reach SR 15.2 billion, compared to the same period in 1441, as well as the fourfold increase in agricultural real estate transactions, which reached SR 4.1 billion in 1443..

The residential sector was worth SR 29 billion, 23% less than in 1441, but similar to 1442. Commercial real estate space jumped 300 percent to 48.5 million m² in 1443, compared to there is two years old.

However, the average value of one square meter of space fell 56% at SR315 in 1443 compared to two years ago.

There were 9,000 commercial properties involved in transactions in the first quarter of 1443, 760 less than the comparable period of 1441. This suggests that the implied average value of a commercial property almost doubled to reach SR 1.8 million. during the first three months of 1443.

For residential properties, including land, which accounts for the bulk of transactions in value terms, the total number of spaces decreased by 26%, while the average value of one square meter of space increased slightly from from 634 SR to 1441.

The number of residential properties traded fell to just under 50,000 in 1443, from 83,500 in 1441. This implies an increase in the average value of a residential property by almost 30% to 580,000 SR from 1,441 .

The total space for residential apartments amounted to 470,000 square meters in the first three months of 1443. This compares to 1,056,043 square meters during the same period in 1441.

This indicates that an implied average value of one square meter has fallen 6% this year to 2,274 SR, from 1,441.

At the same time, the number of apartments has dropped significantly to just 2,016 units this year, down from 4,842 units in 1441. The implied average value of a residential apartment has fallen from SR 525,000 to SR 530,000, from of the first quarter of 1441.

Real estate consultant Knight Frank said, “Homeownership has actually become more affordable since the launch of the National Transformation Plan. Two-bedroom apartments, for example, cost an average of 2.4 times annual income, up from a multiplier of 2.7 in 2016. ”

About Matthew Berkey

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