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Saudi Arabia Real Estate Market Review Q2 2023
August 3, 2023 15 Minute Read
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Saudi Arabia’s real estate sector saw its positive momentum continue in the second quarter of 2023.
Key Takeaways:
- Saudi Arabia’s GDP has 1.1% growth forecast in 2023.
- June 2023 saw headline inflation stand at 2.7%, up from 2.3% compared to a year earlier.
- In Q1 2023, unemployment rate in Saudi Arabia has declined to 5.1%.
- Office rents in Riyadh maintained strong performance levels, with Grade A rents growing by 12.2% year-on-year to Q2 2023, reaching SAR 1,839 per square metre.
- In Jeddah, the Grade A office segment recorded the highest rate of growth in rents among CBRE’s tracked cities, as average rents grew by 20.7% in the year to Q2 2023, standing on average at SAR 1,313 per square metre.
- Year-on-year in the year to date to June 2023, the total number and total value of residential transactions fell by 34.0% and 24.4% respectively.
- In the 12 months to Q2 2023, apartment prices grew in Riyadh and Dammam, while contracting in Khobar and Jeddah.
- In terms of average villa prices, Riyadh, Jeddah, Dammam and Khobar registered improvements of 3.9%, 5.0%, 20.0% and 2.3% respectively.
- In the hospitality sector, Saudi Arabia saw an 8.4 percentage points rise in its average occupancy and 25.2% growth to its ADR, resulting in an increase of 44.4% in the country’s RevPAR.
- Riyadh registered a 1.2 percentage point increase in its average occupancy rate accompanied by a 12.9% increase in its ADR. This has led to its RevPAR increasing by 15.1%.
- In Makkah and Madinah, average occupancies rose by 11.3 and 14.9 percentage points, while ADRs surged by 41.0% and 42.6%, bringing about RevPAR growth of 70.5% and 77.4% respectively.
- Average industrial and logistics rents in Riyadh, Khobar and Dammam have seen rental growth in the year to Q2 2023.
- Riyadh’s average rent saw a marked improvement by 36.9% in the year to Q2 2023 standing at SAR 198 per square metre.
