CBRE - Saudi Arabia Real Estate Market Review Q3 2022

November 22, 2022

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  • Saudi Arabia’s GDP is estimated to have increased by 8.6% in Q3 2022.
  • Total employment stands at 3.9% above pre-pandemic levels.
  • Through Q3 2022, Oil-related GDP and non-oil GDP have both seen growths of 14.5% and 5.6% respectively.
  • Forecast for headline GDP is projected to rise by 7.9% by 2022.
  • Saudi Arabia’s Purchasing Managers’ Index (PMI) maintains expansionary territory with a 57.2 reading.
  • Office market in Saudi Arabia remains centered towards Riyadh, despite lack of availability.
  • Increase in occupier requirements in Jeddah and to a lesser degree in Dammam and Khobar.
  • Riyadh’s Grade A offices average rents increased by 5.9%, while Grade B managed an increase of 3.5% in the 12 months to September 2022.
  • In the Eastern Province, both Dammam and Khobar registered improvements in Grade A offices with 3.9% and 8.2% respectively.
  • Jeddah’s office market witnessed an uptick during Q3 2022 with year-on-year growth of 8.2% for Grade A offices, while Grade B remained stable.
  • In the third quarter of 2022, Saudi Arabia’s residential transactions volume recorded a decline of 15.5%. Moreover, the number of mortgage contracts fell by 15.9% during the same period.
  • The total value of mortgage contracts granted has decreased by 12.7%
  • In the year to Q3 2022, average apartment prices in Saudi Arabia have increased by 7.8%.
  • In the hospitality market, Saudi Arabia’s average occupancy rate and ADR have both improved by 19.5% and 17.6% respectively.
  • The strong recovery in Saudi Arabia’s hospitality sector is attributed to religious tourism, growth in entertainment initiatives and conferences.