Saudi Arabia's Real Estate Prices Increase at Record Rate

Published July 27th, 2019 - 12:00 GMT
The new data goes in tandem with other indices showing the rise in sales of cement in the local market
The new data goes in tandem with other indices showing the rise in sales of cement in the local market. (Shutterstock)
Highlights
The latest indicator was issued by the General Authority for Statistics (GASTAT) on Thursday, showing a 0.4 percent increase of the Real Estate Price Index during Q2 of 2019.

New indicators have shown the ability of Saudi Arabia’s non-oil sectors to witness growth.


The latest indicator was issued by the General Authority for Statistics (GASTAT) on Thursday, showing a 0.4 percent increase of the Real Estate Price Index during Q2 of 2019.

The new data goes in tandem with other indices showing the rise in sales of cement in the local market, which recorded an increase of 20 percent during last month compared to the same month of 2018. This shows that the construction sector in the country is recovering along with the rise in prices of real estate.

Usually the rise in the price index is an indicator that global consultant firms use to figure out the trade volume and growth of any economy in the world. This comes as the Saudi economy enjoys high growth rates this year, exceeding local and global estimates.

In this regard, GASTAT issued Thursday the Real Estate Price Index for Q2 2019 in which it announced a rise of 0.4 percent compared to the previous quarter. Real Estate Price Index in the Kingdom reached 4.8 in Q2 compared to 1,8 percent in Q1.

According to the authority, this rise resulted from the changes in the constituting sectors of the index. 

During Q2 of 2019 compared to Q1, the housing sector witnessed a rise in residential lands up to 0.2 percent and in apartments up to 0.5 percent. However, buildings dropped 0.3 percent, villas 2.7 percent and houses 0.3 percent.

As for the commercial sector, plots rose 0.8 percent compared to Q1, and galleries rose 2.1 percent while shops declined 1.9 percent.

Global rating agencies forecast growth in the Saudi economy in which Fitch and Moody’s affirmed the Saudi credit rating at A+ and A1 with a stable outlook. This proves the global confidence in the Saudi economy and the efficiency of economic reforms taken by the government.


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