2024-02-14-莱坊-Saudi_Arabia_Residential_Market_Review_Winter_2023-24_6页_7mb

Saudi Arabia Residential Market Review: Winter 2023-24 Summary

Overall Market Performance
Residential transaction volumes and values across Saudi Arabia saw a decline of -17% and -9% respectively in 2023, as higher mortgage rates (3–5%) reduced buyer affordability and activity. The shift from delayed homeownership, driven by high home prices and mortgages, restricted demand. A mortgage guarantee service "Dhamanat" (launched in late 2023) aims to ease loan access for nationals, fostering homeownership growth toward the 70%+ target.

Impact of Mortgage Rates & Premium Residency
Mortgage issuance volumes fell by -35% in 2023. New Premium Residency visa options (tied to real estate ownership) may boost demand for high-end properties among international buyers, though affordability challenges remain.

Key Cities Analysis

• Riyadh: Despite robust population growth, apartment prices fell slightly, hindered by high prices in northern neighborhoods. Villa prices increased modestly. The city is set to become a financial hub, driving future demand.
• Jeddah: Transaction volumes and values dropped sharply. Prices for villas and apartments weakened due to economic factors, but mega-projects like Jeddah Central aim to support the market.
• Dammam Metropolitan Area (DMA): Prices for villas and apartments declined modestly; administrative/diversity roles are key drivers for apartment demand.

Supply & Future Projections
Housing supply remains constrained with predictions of nearly 1.5 million units needed by 2030, particularly in Riyadh (population projected to double to ~16 million). Shortages are anticipated despite increasing supply.

Government Policy Responses

• Introduction of affordable housing via the Ministry of Housing and the Sakani Program.
• Promotion of urban migration and economic integration hubs to support residential demand.

Conclusion
Saudi Arabia’s residential market is facing muted activity due to affordability and financing constraints, though targeted visa initiatives and mega-projects in major cities may stimulate demand over the medium term.