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Saudi Housing Sector Reduces Real Estate Transactions by 32%

A general view of Riyadh, Saudi Arabia (Asharq Al-Awsat)
A general view of Riyadh, Saudi Arabia (Asharq Al-Awsat)
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Saudi Housing Sector Reduces Real Estate Transactions by 32%

A general view of Riyadh, Saudi Arabia (Asharq Al-Awsat)
A general view of Riyadh, Saudi Arabia (Asharq Al-Awsat)

The value of real estate transactions in Saudi Arabia has declined by 32% in a week due to the contraction in the housing sector, which has been significantly affected by the record drop in land and villa transaction values.

This has led to a decrease in transaction values to historically low levels, driven by the persistently high mortgage interest rates.

The Saudi real estate stock market index remained stable at 10,014 points last week, keeping the total value of real estate transactions at SAR 5 billion (approximately $1.3 billion).

This resulted in a 6.9% decrease in the overall number of real estate transactions to 5,100 transactions.

In an interview with Asharq Al-Awsat, Ahmed Al-Drees, the general manager at “Al-Mustaqbal” real estate construction company, pointed out that the main aim is to lower prices to make them more accessible to everyone.

The market has recently seen a slight decline in prices, which may be a precursor to a more substantial market downturn.
The cumulative decrease in transaction values will lead to price reductions, especially for investors looking to exit the market or those whose financial capacity has been affected by the recession, particularly those tied to previous financing contracts or facilities.

Al-Drees also believes that mortgage loans are no longer beneficial in the face of rising interest rates, emphasizing that the essence of the problem lies in the excessive increase in property values beyond the reach of a significant portion of aspiring property owners.

This is evident in the noticeable decrease in launching advanced real estate projects, which have significantly declined due to the market conditions.

Al-Drees pointed out that current real estate marketing campaigns are more focused on selling existing properties rather than launching new projects.

Over the past decade, the total market value of traded properties has reached approximately SAR 1.43 trillion (approximately $381 billion).

Within the local real estate market activity, the overall weekly value of real estate transactions has witnessed a 32% decline, influenced by the downturn in all major market sectors, particularly the housing sector.

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Eurasian Development Bank Reveals Partnerships with the Gulf to Develop Energy Projects

Chairman of the Management Board at the Eurasian Development Bank (EDB) Nikolai Podguzov. Asharq Al-Awsat
Chairman of the Management Board at the Eurasian Development Bank (EDB) Nikolai Podguzov. Asharq Al-Awsat
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Eurasian Development Bank Reveals Partnerships with the Gulf to Develop Energy Projects

Chairman of the Management Board at the Eurasian Development Bank (EDB) Nikolai Podguzov. Asharq Al-Awsat
Chairman of the Management Board at the Eurasian Development Bank (EDB) Nikolai Podguzov. Asharq Al-Awsat

Chairman of the Management Board at the Eurasian Development Bank (EDB) Nikolai Podguzov revealed plans to cooperate with GCC countries, including Saudi Arabia, to develop energy infrastructure.

Podguzov told Asharq Al-Awsat that the bank, which is the international financial organization that operates in Central Asia and in Eurasia, works on implementing a working plan based on three strategies.

“Every year we execute around 30-40 new projects and set up agreements,” he said.

“The investments of the bank are growing at least 20% each year,” Podguzov revealed. “We are quite a fast developing bank. Uzbekistan has just joined the bank this year.”

Regarding the size of loans and investments handled by EDB, Podguzov explained that the bank's average investment ranges between $100 million and $400 million. He added however, that the bank is capable of syndicating larger loans that can reach up to $1 billion or more, while the average annual investment volume is around $2.53 billion.

Regarding the bank's work plans for the coming year, Podguzov explained that the Eurasian Development Bank is simultaneously working to strengthen its relations with the GCC countries and the Islamic Development Bank.

“We improve connectivity, transport infrastructure and logistics. We improve access to water for regions in Central Asia. We develop energy infrastructure in our member states,” he told Asharq Al-Awsat.

“We take care of food safety and food safety infrastructure, which provides access to food and provides food security for our member states. And I think in this field we can set up very good economic ties and cooperation between GCC countries and Central Asia.”

“I know that such countries like Saudi Arabia, Emirates, Oman are quite interested in the topics of our strategy,” he said.

“We mainly do non-sovereign finance ... which is very convenient for our potential partners,” he added.

Podguzov said there is a partnership with Masdar which “is a world leader in bringing renewable energy technologies into the world. They are quite active in Central Asia, in Kazakhstan in particular.”

“That is why, for example, we are very much interested in cooperation with Masdar company. This is one of examples. I think logistics and logistics project also could be of interest for Saudi Arabia. A lot of infrastructure could be developed together with the help of Eurasian Development Bank.”

“I believe that it's also very important to build economic bridge between GCC countries and Central Asia. And I think the bank can do a lot in this field and finally we can bring together economic interests of Central Asian and GCC countries.”