Two real estate specialists explained that the real estate market witnessed during the last period a significant decline in the number of transactions and sales of residential real estate by more than 23% during the first seven months of 2022 compared to the same period last year, due to the exceeding of residential real estate prices (land, villas, apartments) for the purchasing power and even the credit of the majority of individuals and families.
A member of the Saudi Economic Association, Abdullah Al-Maghlouth, explained toNews 24“What the real estate market is witnessing locally is consistent with what most real estate is witnessing around the world, entering a corrective phase at the price level after more than two years past, as real estate markets globally witnessed a wave of record rises with the main support of the increase in real estate credit and its association with low interest rates. .
He added that the real estate market ended its performance during July with an annual decline in the total value of its deals by 29.9%, and settled at the level of 9.6 billion riyals, compared to its level during the same month last year, 13.7 billion riyals.
Al-Maghlouth indicated that the annual decline rate extended to the rest of the main indicators of real estate market activity, with an annual decrease in the number of real estate deals by 31.7% (11.3 thousand executed real estate deals), a 32.2% decrease in real estate sales (11.6 thousand real estate assets sold), and a record decrease in the area of executed real estate transactions 72.1 % (71.0 million m2).
At the level of monthly performance, all market performance indicators recorded a monthly decline, compared to their performance during last June, as the total value of market transactions decreased by a record rate of 65%.
He pointed out that the “Real Estate Indicators” platform showed a significant decrease in the number of real estate deals in Riyadh, such as the “Al-Khair scheme” in the north of Riyadh, which is the most prominent neighborhood that witnessed change, by comparing the deals in January 2021, which amounted to 18,451 plots of land, 2806 apartments and 7,736 villas. , with the same month of this year, in which land deals did not exceed the barrier of 13,706 deals, with the demand for villas dropping to 5,476 villas, while apartment deals increased to 3,242 apartments.
Al-Maghlouth confirmed that, according to the figures revealed in Riyadh, the Sakani program will pump about 40,000 products, and the projects of the National Housing Company are 147 thousand housing units, in addition to quality, private and other projects belonging to real estate developers, with a total of 292,000 products, all of which will be pumped during the next 18 months. And through the increase in the real estate supply, there may be a greater impact towards lower prices, after which the market will return to normal.
For his part, a member of the Saudi Economic Association, Abdul Hamid Al-Omari, said:aNews 24Referring to the latest data of the Ministry of Justice until the end of last week, it is not clear that there has been a decline in the prices of real estate of all kinds, but it is still very inflated compared to the fair assessments of its real prices, and the decline in the prices of some very few deals in a narrow number of neighborhoods It cannot be measured or considered as a general phenomenon of market performance.
He added that what has occurred in the performance of the real estate market during the past few months, especially the residential sector, is the slowdown in price growth rates that began to be recorded since the beginning of this year to date, as the real general average of residential real estate prices declined at an annual rate of 20.6% during January 2022. Gradually, until it reached 12.3% on August 11, 2022, despite the slowdown in the annual growth of average residential villa prices from 13.3% (January 2022) to 1.8% (August 2022), and its slowdown for apartments from 8.0% (January 2022) to 2.5 % (August 2022), there was no similar pace of slowdown on the overall average residential land price, which slowed less than 20.9% (January 2022) to 12.5% (August 2022).
And he indicated that the recent decline in the performance of the real estate market coincides with the significant decline in the volume of residential real estate lending, which decreased, according to data from the Saudi Central Bank, by -18% during the first half of 2022, compared to the same period last year, and decreased further in terms of the number of financing contracts. For the same period at -21.2%.