Housing demand still outstrips supply in Riyadh

Housing demand still outstrips supply in Riyadh
Published: 22 October 2014 - 3 a.m.
By: Michael Fahy

Around 13,000 new homes were added to Riyadh's residential market over the past six months, bringing the total supply to around 957,000 units.

However, given the overwhelming demand for homes across the Kingdom in general - and in the capital in particular - the market is still witnessing an increase in rental and sale prices for both villas and apartments, according to property consultancy JLL.

Rental rates for villas in Riyadh increase by 12% year-on-year, while rents for apartments increased by 6%. Sale prices for villas are up 4% year-on-year, compared to 11% for apartments.

It is forecasting that a further 38,000 units will be added next year, and 37,000 in 2016, which is "expected to relieve some of the shortage in Riyadh", it argued.

More than 60% of Saudi citizens do not currently own their own home and the country has an overwhelmingly young population, with three-quarters estimated to be under 30.

More than 690,000 families have been found eligible for a government scheme offering discounted land, loans or other aid to make housing more affordable.

"Despite this and other measures, there is likely to remain a shortage of affordable housing in Riyadh for some time to come," JLL's report concluded.

 

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