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According to an expert from KPMG Al Fozan & Partners, the Saudi real estate sector will witness a "healthy correction" in 2019 after years of rising prices.
Islam Albayaa, the head of the organization's council, said the government's initiatives would drive the Saudi real estate market to stability after the "price spike" of recent years.
The current economic downturn and the changing state of mind of young people are at the origin of new trends.
"This correction is expected to continue in the near term, but the market will pick up in the medium and long term, given recent government initiatives to encourage the sector, especially the Ministry of Housing."
Albayaa cited the ministry's plan for the construction of 19,500 housing units for Saudi citizens, announced in November 2018 as part of its "Sakani" program, as an important market driver in the coming months. In addition, Saudi Arabia's Gigaprojects, such as the Neom, Qiddiya and Red Sea projects, financed by the Public Investment Fund, are also expected to support real estate transactions in Saudi Arabia.
According to KPMG expert Al Fozan & Partners, these benefits will materialize as Riyadh's metro, under construction, is about to be completed. Properties located near the $ 23 billion megaproject metro stations also recorded an appreciation of the price of the land.
"Research shows that square meter prices for residential plots in neighborhoods close to [Riyadh Metro] the resorts have seen a slight increase over last year, "said Albayaa.
"In addition, by looking at some relevant landmarks, we can infer that residents tend to live closer to metro stations, [thus] increase the prices of residential units near such stations.
"The Saudi gigaprojects will promote the real estate market in the new sites, especially the concept of second home in the kingdom. In addition, some of these projects will introduce new badet clbades that will increase real estate investment alternatives, "he continued.
Finally, as Albayaa explains, owners and operators of apartments should also see growth in Saudi Arabia, the kingdom's historic preference for villas giving way to younger generation's preferences, including "replacement of traditional residential units "by housing" Duplex, townhouses and affordable apartments ".
"The current economic downturn and the changing state of mind of young people are driving the new trend," he explained.
"In addition, private investors tend to develop clbadic or luxury apartments because they are less sensitive to the price of current market volatility."
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