Residential Market Dynamics in Riyadh, Jeddah, Dammam and Al Khobar.
Riyadh, Kingdom of Saudi Arabia, 29 August, 2021 – Colliers, the global commercial real estate leader released its latest white paper on the residential market dynamics in Saudi Arabia’s major cities.
A healthy residential real estate market is a critical enabler of a vibrant economy. In the last five years the Ministry of Municipal Rural Affairs & Housing has created a housing ecosystem to attract private investment through easing coordination with government entities, simplifying legislative work and partnership structures. Additionally, with change occurring across all dimensions of life in KSA, it is no different for the residential market.
In this paper, Colliers explores demand dynamics of the residential sector across Riyadh, Jeddah and Dammam & Al Khobar (the Kingdom’s largest cities).
Across Riyadh, Jeddah and DAK, the number of households is projected to grow from 2.31 million in 2020 to approximately 2.88 million by 2030, recording average growth of 2.24%. In July 2021, an official announcement was made outlining the government’s objective to increase Riyadh’s population from the current estimate of 6.8 million to 15 – 20 million by 2030.
“Driven by factors including growing considerations towards family planning and general cost of living-to-affordability dynamics, a major demand driver for new households is the gradual decrease in average household size. As the total number of households increase across the three major cities, average household size is expected to decrease from 5.8 to 5.3 by 2030” Commented Imad Damrah, Managing Director | Colliers – Saudi Arabia.
The paper explores key emerging trends in KSA’s residential sector such as size, master planned communities, affordability, the role of the Ministry of Municipal Rural Affairs & Housing and construction technology.
“Residential unit costs have been gradually driven down by the adoption of transformative technology such as additive manufacturing processes. This has presented the Ministry of Municipal Rural Affairs & Housing and the developers with new opportunities to tackle issues such as standardising costs and quality, accelerating speed of implementation, minimising waste, reducing work related accidents and facilitating the construction of varied unit configurations”. Says Imad
The research concludes with an outlook for the residential market in the Kingdom.
“The government has played a transformative role in developing the residential sector’s ecosystem in KSA, acting as an active intermediary in boosting supply, reducing cost and facilitating home financing to meet demand. Another step forward is the establishment of the Real Estate General Authority (REGA), which is expected to provide more transparency to the market by allowing public access to transaction prices” concludes Imad.