PROPERTY

Saudi property prices to fall by up to 40%, says forecaster

Saudi Arabia’s real estate market may see a 40% price drop due to a surplus in residential units. (File photo: AFP)

Saudi Arabia’s real-estate market is forecast to see a 30 to 40 percent decline in prices, especially in residential units, according to one forecaster.

Abdullah al-Maghlouth, member of the Saudi Economic Association, said that the predicted decline is due to oversupply in the market.

“Most real estate and development companies constructed thousands of residential units over the past two years, resulting in a surplus,” he told Aleqtisadiah. “They want to sell these units but their prices are too high; all parties will benefit from suitable prices when they are offered.”

Brokers, real estate speculators, and developers benefit from the high prices, but prices are likely to decline by 30 percent and may exceed a 40 percent decline in specific areas, al-Maghlouth said.

According to the newspaper, al-Maghlouth expects prices to stabilize when the Ministry of Housing and real estate companies join efforts to offer more residential units.

“15,600 apartments will be delivered in the next three years,” Aleqtisadiah quoted real estate expert Badr al-Shammari as saying.

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Last Update: Tuesday, 4 June 2013 KSA 17:51 - GMT 14:51
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