Markaz: The Saudi Real Estate Sector Continues To Recover With An Expectation Of A Revival In The Kingdom's Gdp Growth
The Kuwait Financial Centre "Markaz" recently issued its “KSA Real Estate Outlook H1 2021” report, where it highlighted expected GDP growth in Saudi Arabia’s for 2022, mainly on the back of increasing oil prices and higher production.
The report also revealed positive indications of stability and recovery in the Saudi real estate sector, and expects real estate prices to stabilize after a long period of decline since 2015. Government spending on infrastructure projects as part of the Vision 2030 program is expected to boost non-oil GDP growth, and the fiscal balance, which was severely dented due to Covid-19, is expected to improve in 2021 & beyond.
Markaz’s report indicated that investments are expected to pick up as the Government initiates major projects like Neom City, and follows through with the Saudization policy. Moreover, steady population growth, government subsidies, and the enacted mortgage law are enabling banks to finance home purchases fueling the growth in the residential sector.
Commenting on the current Real Estate scene in KSA, Mr. Bassam N. Al Othman, Managing Director, MENA Real Estate at Markaz, said: “We strongly believe that the Saudi Arabian real estate sector is currently recovering, and we anticipate an acceleration in pace over the next few years, based on our expectations of favorable macroeconomic factors during this period.”
“Markaz analysis is based on its proprietary ‘Real Estate Index’, which helps investors assess the real estate market. The Real Estate Index is derived from various economic indices, such as oil and non-oil GDP, inflation rates, increase in employment opportunities, and others. We also analyzed data related to the Saudi real estate market covering the past seven years from which we extrapolated our expectation for the sector.” Al Othman added.
The report also indicated that the Saudization program may lead to an increase in employment opportunities, which is yet another positive indicator for the real estate sector. Moreover, resuming work from office spaces and an increase in tourism is expected to improve the overall demand for the office, commercial, and hospitality sectors.
Kuwait Financial Centre “Markaz”
Established in 1974, Kuwait Financial Centre K.P.S.C “Markaz” is one of the leading asset management and investment banking institutions in the MENA region with total assets under management of over KD 1.03 billion as of 30 September 2020 (USD 3.33 billion). Markaz was listed on the Boursa Kuwait in 1997.