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Weekly activity in the local real estate market was down 10.9% last week, from its record 36.0% the week before, so that the total value of market transactions at the end of the last week stood at the level of 4.5 billion riyals, and the decline in activity in the local real estate market over the past week is due to a drop in the value of residential and commercial transactions, where the value of transactions housing sector saw a weekly decline of 12.0% (65.6% of the total value of weekly real estate transactions), compared to an increase of 32.6% the week before, to stabilize at the end of the week last below the level of three billion rials. The activity of the commercial sector also decreased (24.9% of the total value of weekly transactions in the real estate market). The value of its weekly trades was down 15.8%, from a record high the previous week of 41.0%, so that the sector’s trade value stabilized late last week in the level of 1.1 billion riyals.
In contrast, the total value of agricultural and industrial transactions registered a weekly increase of 17.6% (9.5% of the total value of weekly transactions in the real estate market), against a record 53.4% the previous week. , and stabilized. at the end of last week to 430 million riyals. As for other indicators of the weekly performance of the local real estate market, the number of real estate transactions registered a decrease of 5.6%, compared to its previous weekly increase of 23.6%. The number of properties sold was down 5.3% from its previous weekly increase of 24.9%. The total square footage of real estate transactions executed over the past week fell 26.8%, from its previous weekly increase of 49.3%.
The escalation of frantic speculation on land (Al-Khair project in Riyadh)
Frenzied land speculation has intensified in many parts of the major cities and has been on an upward trajectory since the start of 2019 and peaked in the fourth quarter of last year, compared to previous years, and did not grow. is not stopped at these records. limits, but broke it in the first seven weeks of this year, and hit higher than its peak in the fourth quarter of last year. The escalation of land speculation in these parts of major cities has been accompanied by an unprecedented rise in market prices for these remote land relative to major cities.
In view of one of the biggest evidence of such rampant speculation on land, represented by (the Al-Khair project in Riyadh), whose total value of real estate transactions on land only at the end of 2020 has registered an annual growth of 57.2% (it recorded an annual decline in the total market for the same period of 1.1%)), compared to its largest increase in 2019, which reached a record annual growth rate of 225.3 % (recorded an annual increase in the total market for the same period of 23.7 percent), and this steady growth continued in the first seven weeks of this year, compared to the same period last year , to record a record annual growth of 84.0%.
And as detailed data on the value of real estate transactions in the (Al-Khair program) showed, its main asset was real estate transactions specifically on residential land, which accounted for around 94% of the total value of land transactions in the scheme, and was not satisfied with these standard rates, but spread to escalation. The percentage of its acquisition of the total value of transactions for the residential sector throughout Riyadh city took an upward trajectory in 2017-2021, from 1.4 percent of the total value of transactions in the housing sector to Riyadh at the end of 2017, to 2.1% of the total at the end of 2018, then to 4.0% of the total at the end of 2019, then to 7.5% of the total at the end of 2020, and finally it reached 11.7% of the total in the first seven weeks of this year, which was also around 4.4% of the total value of housing sector transactions in the Kingdom!
As a result of such heavy land speculation in the (Al-Khair program) between 2019 and 2021, it was only natural for its market prices to rise in an unprecedented way, as the average residential land price in 2019 has recorded a record annual increase. by 67.9%, and recorded higher annual growth in 2020. Its record rate reached 75.7%, and with the intensification of land speculation in the regime in the first seven weeks of this year, it in turn recorded record annual growth, compared to the same period last year, reaching 53.1% at the end of last week. This rebound in market prices for the regime’s residential land over the period 2019-2021, the comparison for the entire period shows that it recorded an all-time high of 351.4 percent, which means that residential land market prices under the project have doubled in less than 26 months by approximately 3.5 times!
Real estate transactions in the (Al-Khair regime) are a living witness of many similar projects in a number of large cities, which are concentrated, as official data released by the Ministry of Justice confirms the feverish land speculation, and the record market prices for land in general. And residential land in particular, has moved their enemy on a large scale to neighborhoods and other plans in cities, and given the lack of large parts of these modern plans that are far from downtown many services d infrastructure, it will be the contagion of market price inflation for both residential and commercial land, The most severe impact in neighborhoods and the most comprehensive plans at the level of services! This confirms the utmost importance of accelerating the stages of development and reform of the local real estate market, the main of which is the rapid completion of the application of the remaining stages of the royalty system on white lands (second, third and fourth ), and accelerate the extension of their coverage to the rest of the main cities as decided by the ministerial committee on the basis of the application of the system.
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