Saudi Arabia Real Estate Market Review Q1 2023
June 14, 2023
- Saudi Arabia’s GDP is projected to register a growth rate of 1.6% in 2023.
- Oil-related GDP improved by 15.4% in the year to Q4 2022, while non-oil GDP rose by 5.4%.
- Headline GDP has managed to conclude 2022 with a growth of 8.7%.
- Saudi Arabia’s Purchasing Managers’ Index (PMI) reading of 58.7 in March following a February reading of 59.8.
- Office market in Saudi Arabia transitioned into Q1 2023 with a continuation of the strong performances seen in the end of 2022.
- Riyadh’s Grade A produced an annual increase of 9.3%, while Grade B offices average rents has grown by 14.0%.
- In the Dammam Metropolitan Area (DMA), both Dammam and Khobar have registered increases in Grade A average rents by 9.7% and 8.0% respectively.
- Grade B office market in Dammam has slightly improved by 1.6% in Q1 2023.
- Jeddah’s Grade A office market improved markedly by 13.8% year-on-year, as Grade B offices marginally incurred 1.0% rise in Q1 2023.
- The number of mortgage contracts issued by banks has fallen by 35.8%.
- Apart from Khobar where average villa prices declined by 6.1%, average villa prices improved in Riyadh, Jeddah and Dammam with growth of 6.0%, 10.2% and 28.1% by the end of Q1 2023.
- Average apartment price in Riyadh was sole positive performer across the tracked cities in Q1 2023 with an uptick of 17.3%, as apartments in Jeddah, Khobar and Dammam diminished annually by 0.7%, 1.6% and 2.5% respectively.
- The industrial sector posted positive performance in Q1 2023 with Jeddah’s warehouses average rental rate decline representing the only decline of 9.8%. However, average price in Riyadh, Dammam and Khobar increased by 18.1%, 12.2% and 5.8% each.
- Riyadh, Makkah, Madinah and Jeddah have managed to beat their pre-COVID levels for ADR, average occupancy rate and RevPAR in the first quarter of 2023.