Saudi Arabia’s residential market is expected recover in the short to medium term, supported by diversification efforts and regulatory initiatives, Knight Frank said in a recent report.
However, housing affordability is a rising challenge with a growing urban population and a mismatch in the provision of housing stock to low and middle tier buyers.
“The government is actively looking to ease these pressures with the roll out of the Sakani program and initiatives to enable greater access to the mortgage market. The scheme and the efforts to expand the mortgage market are expected to alleviate pressures in this area,” the consultancy added.
From longer term perspective, the development of megaprojects such as mixed-use communities and large scale infrastructure projects will play a vital role in responding to new demand dynamics and spur meaningful urban regeneration in key cities across the Kingdom.
Meanwhile, the report found that the Kingdom’s residential market may be heading towards the “bottom of its cycle” as the market remained under pressure in the first half of 2019. Transaction volumes have picked up significantly across key cities.
“The residential market remains under pressure as the rising affordability challenge and the lack of suitable supply for middle and lower tier buyers continue to weigh on the sector,” said Raya Majdalani, research manager at Knight Frank.
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