Saudi Real Estate Experts Forecast Surge in Residential Property Demand

Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)
Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)
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Saudi Real Estate Experts Forecast Surge in Residential Property Demand

Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)
Al-Fursan Suburb... One of the housing projects in the northeast of the Saudi capital, Riyadh (National Housing Company)

Saudi Arabia’s property prices rose by 0.6% in the first quarter of this year, mainly due to a 1.2% increase in residential property prices. Government programs are helping keep the market stable, and experts predict higher demand for homes soon.

The “Sakani” program, run by the Ministry of Municipal and Rural Affairs and Housing, assisted 32,000 Saudi families in the first quarter, a 15% increase from last year.

Residential property prices went up by 1.2% annually, driven by a similar increase in land prices. Apartments saw an 0.8% increase, but residential buildings, villas, and houses experienced slight decreases.

Commercial property prices dropped by 0.5%, influenced by lower land and exhibition prices. However, prices for commercial buildings remained steady.

Experts note that residential property prices are resilient, thanks to government initiatives. They expect interest rate cuts this year, which could boost the real estate market.

Ahmed Al-Faqih, a real estate engineer and analyst, emphasized that reports from government entities and research companies have consistently shown that the increase in interest rates over the past two years has coincided with rising property prices and transaction values.

“This is driven by several government incentives, including the momentum of major real estate projects injected into Riyadh, which accounts for more than 35% of the real estate market transactions, as well as in Jeddah," Al-Faqih told Asharq Al-Awsat.

He noted that real estate transaction indicators have been on the rise since the fourth quarter of last year, indicating expectations of interest rate cuts multiple times during the current year, which would mean further activity in the real estate market.

According to Al-Faqih, the residential sector has not been significantly affected price-wise and has remained generally resilient, attributed to the supply and demand equation leaning towards increased demand and limited supply.

He mentioned that demand is driven by population growth, migration to major cities, and the possibility of property ownership for holders of distinguished residency.

The Housing Ministry aims to increase home ownership to 70% by 2030 by offering subsidized land and support programs. The market also relies on commercial, industrial, and investment properties.

Regulations like the “Real Estate Contributions” program aim to enhance transparency and protect stakeholders' rights. These efforts are expected to stimulate investments and drive growth in the real estate market.



Gold Extends Gains as Trump Tariffs Fuel Safe Haven Flows

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
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Gold Extends Gains as Trump Tariffs Fuel Safe Haven Flows

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo

Gold prices rose for a second straight session on Tuesday, but traded below the recent all-time highs, as uncertainty around US President Donald Trump's tariff plans continued to fuel economic growth concerns and safe haven flows into bullion.

Spot gold gained 0.6% at $2,913.79 an ounce as of 0714 GMT. It hit a record high of $2,942.70 last week.

US gold futures added 0.9% to $2,925.50.

"Trump's disruptive modus operandi, aggressive rhetoric and tariffs - whether actual or threatened - could unravel global trade and intricate supply chains," said Nikos Tzabouras, senior financial writer at trading platform Tradu, Reuters reported.

"With uncertainty surrounding the global economy and the broader geopolitical landscape in the Trump 2.0 era, gold is set to remain a natural beneficiary of risk-off flows and central bank buying."

Since taking office last month, Trump has swiftly redrawn the global trade battlefield with a series of tariffs, while plans are already in motion for sweeping reciprocal tariffs, aimed squarely at any nation that taxes US products.

"Gold continues to benefit from the uncertainty surrounding the US. government's tariff policy. Central bank buying should also continue to provide support, even if there is no new data on this," Commerzbank analysts said in a note.

The market's focus has now shifted to the US Federal Reserve's January meeting minutes due on Wednesday for clues into the central bank's interest rate trajectory.

"Price gains are also supported by growing expectations that the Fed will cut rates in 2025 - a sentiment that gained further traction among traders after last week's disappointing US retail sales figures," Ricardo Evangelista, senior analyst at brokerage firm ActivTrades, said.

Bullion benefits from geopolitical and economic uncertainties, as well as rising price pressures, but higher interest rates diminish the asset's allure.

Spot silver fell 0.9% to $32.50 an ounce. Platinum jumped 0.9% to $985.20 and palladium climbed 1.6% to $978.00.