In its Q1 2020 KSA real estate report, real estate company JLL noted that delivery of residential units in the kingdom's Riyadh and Jeddah cities remains active, as the government continues its drive towards increasing homeownership to 60% by 2020 and 70% by 2030.
In light of the impact of the ongoing COVID-19 pandemic, JLL has confirmed that the Q1 2020 real estate performance indices in the report have been held at Q4 2019 values, except for certain cases.
In Riyadh, a total of 7,500 units were delivered in Q1 2020. Meanwhile, in Jeddah, approximately 1,800 units were handed over in the same period, the report states.
As in the case of KSA's hospitality, office, and retail sectors, the kingdom's residential sector's under-construction projects or those that are in the supply pipeline may witness delays in handover.
Riyadh's residential sector witnessed a 6% decline year-on-year in average sales prices and 2% decline year-on-year in average rental rates in Q1'20. Meanwhile, Jeddah's residential sector recorded a 7% drop year-on-year in average sales prices and 5% drop year-on-year in average rental rates in Q1'20.
JLL foresees a slowdown in demand of units and projects in the sector, owing to the current situation, and with no specific stimulus package in support of the residential market. However, the company notes that demand in KSA's residential sector in the short to mid-term has been generated and supported by the Sakani programme and several mortgage products, which were launched over the past couple of years.