ALBAWABA – Knight Frank, the global real estate agency, has revealed that Riyadh, Saudi Arabia, saw a 7 percent increase in transactional volume during 2023, while other cities in the kingdom like Jeddah and Dammam saw a decline of 21 percent and 12 percent respectively.
However, the report from the UK-based agency notes a downturn in the overall kingdom’s transactional volumes by 17 percent, with total volume of real estate deals dropping 9 percent to 197.7 billion Saudi Riyal ($52.71 billion).
Faisal Durrani, head of research and partner at Knight Frank in the Middle East and North Africa territory, said that the rising cost of borrowing has made affordability problems worse, which are partly caused by high housing values, noting that interest rates shot up to 6% by the end of the previous year from just 0.8 percent in January 2021.
Buildings group from Worood district and Uroba road in Riyadh, Saudi Arabia (Shutterstock)
Durrani also added that that there is a fundamental transformation in demand occurring in the Kingdom's residential sector, touching on the positive growth of Riyadh, he said that over the previous two to three years, the residential sector has seen tremendous price increase, with the city prices, continuing to rise into record-high territory.
Knight Frank also stated that, from January to November 2023, the overall number of mortgages granted decreased by 35%, as opposed to a 22% decrease over the same time in the prior year, with the total value of mortgages granted falling by 36% to SR74.2 billion, during the same period, as prospective purchasers adopted a lengthier holding pattern due to rising interest rates and prices.
