Saudi Arabia’s real estate market experienced exponential growth with residential mortgages up ten-fold in H1 2021 compared to its corresponding financial period in 2016, according to estate consultant firm Knight Frank.
“The momentum injected into the national property market is best reflected in the fact that at over 150,000, the number of residential mortgages issued in H1 2021 is more than 10-times the level registered in H1 2016,” Head of Middle East Research at Knight Frank Faisal Durrani said.
“Clearly, the government is delivering on its pledge to improve access to world-class housing for all and is doing so in style.”
The agency has been tracking close to $1 trillion worth of real estate and infrastructure projects that were announced as part of the Kingdom’s National Transformation Plan. This figure accounts for only a third of the total $3.2 trillion of spending that is planned. As of yet, this includes eight mega-projects and new super cities.
“… In the national office markets, headline rents were clearly impacted by the pandemic, but rates for the best offices in Riyadh have recovered to pre-pandemic levels and demand is growing rapidly. The industrial markets too are expanding at an unprecedented rate as requirements outstrip demand in many locations,” he added.
Efforts by the Saudi government to reshape the economic landscape of the country are underway and have been driving a sharp upturn in business activity, a statement released by the firm said, with figures showing that the first quarter of 2021 saw the highest-ever number of new foreign business investment licenses being issued.
“The peak in residential mortgages seems to correlate with demand for real estate advisory services this year, exceeding pre-pandemic levels seen in 2018 and 2019,” said Harmen de Jong, Partner, Real Estate Strategy and Consulting at Knight Frank Saudi Arabia.
“We are beginning to see increased appetite from private sector real estate developers in the form of public-private-partnership initiatives with large scale government led projects. This is a key trend which will further support the realization of Vision 2030.”
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