Saudi govt initiatives drive demand for ‘affordable’ housing in Jeddah: CBRE
Housing initiatives unveiled by the Saudi government are boosting demand for residential properties in Jeddah, as deliveries of units in lower- and middle-income segments gain pace, CBRE said in its recent report.
The development of affordable housing is part of the Ministry of Housing's Sakani Program, as the government aims to increase homeownership rates among its citizens by 60 percent by 2020 and 70 percent by 2030.
Furthermore, growing demand for lower- to mid-income housing is driving up residential mortgages, which rose 226 percent in the first five months of 2019 compared to the same period last year, the report said.
Hotel occupancy rates rise
The hospitality sector experienced high occupancy rates during the Eid period and the Jeddah Season.
Close to 7,000 tourist visas were issued around the Jeddah Season, with occupancy rates in hotels in certain areas reaching 85 percent to 95 percent. This increase was further driven by Saudi Arabia’s cabinet approving electronic visas for foreign visitors to attend sporting events and concerts, the report said.
The city is now emphasizing on offering more affordable and midscale hotel developments, with new 18,000 keys expected to become operational in 2020.
Seeking flexible office space
As the office market remained subdued, landlords offered enhanced services and amenities to drive up their occupancy rates, CBRE said.
However, a notable change in the office market as more companies opted for flexible office spaces to meet changing business needs. Additionally, government initiatives to support entrepreneurs, and small and medium enterprises through its “Munshaat” program boded well and is expected to boost demand in the overall office market.
Entertainment driving retail
With retail sales impacted within the super-regional and regional mall categories, the report found growing entertainment sector was driving footfall. High-quality retail space with innovative concepts also lead to increase in footfalls in brick-and-mortar retail spaces, the report added.