Monday, June 21, 2010

Riyadh house prices seen rising 10% a year to 2012

House prices in Saudi Arabia's capital city are predicted to rise up to 10 percent a year over the next two years, Jones Lang Lasalle has said.
In its new Riyadh City Profile report, analysts said they had seen a "modest recovery" so far in 2010 after average purchase prices fell last year.It said a slowdown in the supply of new homes caused by tighter construction credit conditions would create "a large pool of untapped demand" over the next couple of years.
"With supply restrained due to recent credit conditions...we expect a cyclical recovery in the housing market with prices capable of growing 5-10 percent per annum over the next two years," the Jones Lang Lasalle report said.
"Recent increases in construction costs many also add pressure to residential prices over the next 12-18 months," it added.Research from local bank Saudi Fransi shows that Riyadh apartment prices are up on average by six percent compared to the second half of 2009, while villas are typically 3.9 per cent higher.
JLL said that the rental market in Riyadh had witnessed double digit increases even during the global downturn but that rents "were finally starting to fall in line with the rest of the inflation measures".The property and investment specialists added in its report that the total inventory across Riyadh is roughly 900,000 housing units.Regarding the office market in Riyadh, JLL said more than one million sq m of new office space is expected to enter the market over the next five years.
It said the number of new buildings was causing vacancy rates to increase and tenants were enjoying increasing power vis-à-vis landlords.On the retail front, the sector is expected to see improvements in both sales and rents over the remainder of 2010, the JLL report added.
The current stock of retail space in Riyadh is estimated to be around 2.3 million sq m and is expected to increase to 2.9 million sq m by 2014 serving new suburban districts. This increase is expected to push average rents for showrooms to downwards rates, the report said.

JLL added that consumer confidence was improving and the growth of retail sales had resumed. The value of point of sale transactions started to increase from mid 2009 and was up by 22 percent in April 2010 in year on year terms, the report said.

18 comments:

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Idell said...

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懿綺懿綺 said...

One swallow does not make a summer.............................................................

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吳玉婷 said...

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戴昀黃慧婷德 said...

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Hanan said...

Hello there, Nice blog and very informative, I enjoyed your post

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William King said...

May be this is due to Dubai Real Estate crisis as property investors over there are investing in surrounding areas like Riyadh, Abu Dhabi and taking their money out of Dubai.
Dubai Property
http://www.bayut.com