Residential property transactions in Saudi Arabia's Riyadh, Jeddah and Dammam Metropolitan Area (DMA) rose sharply year-on-year during the third quarter of the year and the positive momentum is expected to continue, a study by Knight Frank showed. According to the KSA Real Estate Market Update Q3 2019 study, the number of residential transactions in Riyadh rose 122 percent year-on-year in Q3 2019, while Jeddah's transactions increased 82 percent and DMA's transactions rose 72 percent. Knight Frank expects the volume of residential transactions to maintain a positive momentum over the next 12 months, underpinned by the Sakani affordable housing program and the regulatory efforts to expand the mortgage market. For the offices market, average rental rates in Riyadh stood at 1,460 riyals/sqm and 768 riyals/sqm across the Grade A and Grade B segments respectively. In Jeddah's office market, average rental rates stood at 1,048 riyals/sqm and 749 riyals/sqm, while for DMA, rates were at 958 riyals/sqm and 661 riyals/sqm. The study expects rents and occupancy rates in the office market to soften further as supply outstrips demand for the foreseeable future. In the hospitality sector, August's average daily rates fell yoy 9.1 percent in Riyadh according to the study, while they dropped 11.4 percent in Jeddah and fell 15.6 percent in DMA. The sector is expected to recover over the medium term on the back of the government's push towards tourism growth supported by the various initiatives in favor of increased visitation in line with Vision 2030, the report said. In the second quarter of 2019, average rental rates in super regional and regional malls were recorded at 2,748 riyals/sqm for Riyadh, 2,945 riyals/sqm for Jeddah and 2,315 riyals/sqm for DMA. Knight Frank expects the retail sector across the main cities to remain challenged by a significant supply pipeline and an increased competition from e-commerce. Source: Zawya
