Arab News, Sat, Jun 01, 2024 | Dhu al-Qadah 24, 1445
Riyadh residential market sales surge 77%: CBRE report
Saudi Arabia:
Saudi Arabia’s residential market experienced robust growth in demand, with
Riyadh witnessing a 77 percent year-on-year increase in sales transactions in
the first quarter, a new report showed.
According to global consultancy firm CBRE, Jeddah
residential transactions surged by 92.9 percent in the first three months of
this year, while Dammam saw a 28.0 percent increase year-over-year.
Taimur Khan, head of research MENA, said: “Whilst
we have seen strong performance across commercial sectors within Saudi Arabia in
the recent past, something which continues to date, we are now beginning to see
the residential sector also register a significant surge in demand. This is, in
turn, underpinning performance in the sector.”
As new stock continues to be delivered, he said
they expect this trend to continue, with demand outpacing supply for some time
to come.
“However, we also expect that there might be some
bifurcation in performance within the residential sector, with new quality
assets likely to register record rates,” added Khan.
Villa prices in Riyadh, Jeddah, and Khobar rose by
3.6 percent, 0.2 percent, and 3.1 percent, respectively. Meanwhile, Dammam saw a
slight decline of 0.5 percent.
In the apartment segment, prices in Riyadh,
Dammam, and Khobar increased by 8.4 percent, 0.9 percent, and 0.4 percent,
respectively, compared to the previous year.
However, Jeddah experienced a 1.1 percent decrease
in average apartment prices over the same period.
Throughout the first quarter of this year, the
office sector witnessed a slowdown in rental growth across all market
segments.
Prime rents in Riyadh’s occupier market surged by
14.5 percent, while Grade A and Grade B rents increased by 11.8 percent and 10.3
percent, respectively.
In Dammam, Grade A rents rose by 8.0 percent,
Grade B by 6.2 percent, and Khobar’s Grade A rents saw a 4.6 percent increase.
Occupancy rates stood at 93.8 percent, 99.7
percent, and 99.4 percent for Prime, Grade A, and Grade B segments in Riyadh,
while Dammam and Khobar displayed respective Grade A occupancy rates of 86.3
percent and 85.2 percent as of the first quarter.
In Jeddah, Grade A and Grade B rents increased by
13.6 percent and 13.1 percent, respectively, with occupancy rates reaching 92.5
percent and 86.6 percent.
The hospitality sector’s performance remained
strong throughout the first quarter due to high visitation levels.
Year-on-year, from January to March 2024, the
average occupancy rate saw a slight uptick of 0.1 percentage points.
Additionally, the country experienced an 11.8
percent increase in average daily rate, leading to a 12.0 percent rise in
revenue per available room.