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: 

  1. Saudi Arabia’s GDP has 1.1% growth forecast in 2023.

  2. June 2023 saw headline inflation stand at 2.7%, up from 2.3% compared to a year earlier. 

  3. In Q1 2023, unemployment rate in Saudi Arabia has declined to 5.1%.

  4. 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. 

  5. 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.

  6. 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.

  7. In the 12 months to Q2 2023, apartment prices grew in Riyadh and Dammam, while contracting in Khobar and Jeddah.

  8. In terms of average villa prices, Riyadh, Jeddah, Dammam and Khobar registered improvements of 3.9%, 5.0%, 20.0% and 2.3% respectively.

  9. 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. 

  10. 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%.

  11. 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.

  12. Average industrial and logistics rents in Riyadh, Khobar and Dammam have seen rental growth in the year to Q2 2023.

  13. Riyadh’s average rent saw a marked improvement by 36.9% in the year to Q2 2023 standing at SAR 198 per square metre.