Saudi Vacant Properties Face Fees as Market Awaits Supply Increase

One of the projects of the National Housing Company in Jeddah (the company)
One of the projects of the National Housing Company in Jeddah (the company)
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Saudi Vacant Properties Face Fees as Market Awaits Supply Increase

One of the projects of the National Housing Company in Jeddah (the company)
One of the projects of the National Housing Company in Jeddah (the company)

Following the adoption on Wednesday of the executive regulations governing fees on vacant properties, the Saudi real estate market is awaiting a new phase aimed at increasing residential and commercial supply by encouraging owners of unused units to put them into use or offer them for rent or sale, in a regulatory move intended to curb hoarding and achieve greater balance between supply and demand in major cities.

The step comes as part of a package of real estate reforms led by the government to enhance the efficiency of real estate assets and improve the housing environment, in line with directives from Crown Prince and Prime Minister Mohammed bin Salman, under the goals of Vision 2030 aimed at building a more sustainable and better regulated real estate market.

On Wednesday, the Ministry of Municipalities and Housing announced the adoption of the executive regulations for fees on vacant properties as a regulatory instrument to be activated when vacancy criteria are met, with the cities and geographic areas subject to implementation to be announced later in accordance with approved standards.

Real Estate Assets

The regulations aim to improve the efficiency of real estate asset utilization, stimulate the use of vacant properties, increase supply, and strengthen balance in the local market. The annual fee on vacant properties was set as a percentage of fair rental value, not exceeding 5 percent of the building’s value.

The fees will be determined within a specific geographic area of a city by ministerial decision, based on indicators including vacancy rates, rising property prices, housing costs, and supply and demand dynamics.

Vacant properties are defined as buildings located within the urban boundary that remain unused for an extended period without acceptable justification, in a manner that affects the availability of sufficient supply in the real estate market.

As for the “vacancy period,” the regulations apply to occupiable buildings within geographic areas subject to implementation if they remain vacant for six months during the reference year, whether continuously or intermittently.

Bringing Units Back Into Circulation

Real estate specialists told Asharq Al-Awsat that the adoption of the executive regulations for vacant property fees represents a qualitative shift in regulating the Saudi market by pushing owners of unused assets to put them into use instead of leaving them closed for long periods.

They noted that the new fees would help bring residential and commercial units back into circulation and improve the efficiency of utilizing real estate inventory, particularly in major cities witnessing growing demand for rentals and housing.

The specialists said the next stage could witness a gradual increase in real estate supply as more owners move toward leasing or selling to avoid annual fees, which would help ease the pace of price increases and achieve a better balance between supply and demand.

They added that the Saudi real estate market is “entering a more mature phase based on operational efficiency and the actual investment of assets, supported by new legislation and ongoing reforms aimed at limiting monopolistic practices and enhancing sustainability in the real estate sector.”

Encouraging Property Owners

Abdul Nasser Al-Abdullatif, chief executive of Raoud Real Estate, told Asharq Al-Awsat that the adoption of the executive regulations for vacant property fees “represents an important regulatory step toward enhancing the efficiency of the real estate market, particularly given the presence of a number of unused residential and commercial units despite growing demand for rentals.”

He said the objective of the fees “is not limited to the financial aspect, but is primarily aimed at encouraging property owners to invest in unused assets and reintroduce them into the market instead of leaving them closed for long periods.”

He expected the regulations to contribute to “increasing rental supply in the coming period, as continued vacancy of units will impose direct financial burdens on owners, pushing a segment of investors to offer their properties for rent or sale, which could gradually help ease pressure on rental prices, particularly in major cities with high demand.”

Identifying Vacancies

Al-Abdullatif said the effects of the decision would not appear immediately “because the real estate market responds gradually to new regulations, in addition to the fact that the extent of the impact will depend on the efficiency of implementation mechanisms, the accuracy of identifying vacant units, and the extent of owners’ compliance with the regulations.”

He added that the Saudi real estate market is moving toward a more mature and better regulated phase, supported by modern legislation, housing programs, and urban transformation initiatives. He expects the coming years to witness greater focus on improving the operational efficiency of real estate assets and maximizing their economic benefit, which would positively contribute to increasing supply and achieving better market balance.

Additional Supply

For his part, real estate specialist Ahmed Omar Basodan told Asharq Al-Awsat that the adoption of the new regulations reflects a clear direction toward improving the efficiency of real estate assets and revitalizing the rental market by injecting more idle supply within urban areas in cities.

Basodan said property owners would come under pressure under the new regulations and would have no option but to lease at reasonable prices appropriate to each area and neighborhood, rather than waiting for higher prices using the same previous approach. He stressed that real estate investment would increasingly move toward utilization rather than hoarding.

He added that the real estate market would gradually add further supply in the coming period and that owners “will reconsider holding vacant properties, which means a balance between supply and demand and lower prices, which is what the government is seeking in the next phase.”



Gulf Markets Hold Firm Despite Tensions, US Rate Hike

A man watches stocks fall in the Kuwaiti market (AFP)
A man watches stocks fall in the Kuwaiti market (AFP)
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Gulf Markets Hold Firm Despite Tensions, US Rate Hike

A man watches stocks fall in the Kuwaiti market (AFP)
A man watches stocks fall in the Kuwaiti market (AFP)

Most Gulf stock markets advanced on Thursday despite mounting geopolitical tensions, as investors weighed the fallout from the US Federal Reserve’s first interest-rate hike in more than three years.

Most Gulf Cooperation Council central banks raised their key rates after the Fed lifted rates by 25 basis points on Wednesday.

Most Gulf currencies are pegged to the US dollar, except the Kuwaiti dinar, which is tied to a dollar-dominated currency basket. Gulf monetary policy therefore tends to track the Fed’s moves.

The Saudi Central Bank, known as SAMA, raised its repo and reverse repo rates by 25 basis points to 4.50% and 4.00%, respectively.

The Central Bank of the United Arab Emirates lifted the base rate on its overnight deposit facility by 25 basis points to 3.90%, while the Central Bank of Oman raised its repo rate by the same amount to 4.50%. Qatar Central Bank also increased its key rates by 25 basis points.

Subdued shipping through the Strait of Hormuz continued to weigh on investor sentiment, with attention turning to US President Donald Trump’s expected meeting with Gulf leaders next week.

Strong domestic fundamentals could continue to support the markets despite geopolitical pressures, said Milad Azar, a market analyst at XTB MENA.

Hopes that the Fed’s move would begin to rein in inflation helped calm a global bond selloff and curb a sharp recent rise in yields.

Mixed market performance

Saudi Arabia’s benchmark index surrendered early gains to close flat. Saudi National Bank fell 1.3%, while Saudi Aramco lost 0.5%.

Dubai’s main index gained 0.3%, helped by a 0.5% rise in Emaar Properties.

Abu Dhabi climbed 0.5%, while Qatar added 0.2%.

Bahrain fell 0.3% and Kuwait lost 0.4%, while Oman advanced 0.7%.

Outside the Gulf, Egypt’s blue-chip index rose 1.2%, supported by a 0.6% gain in Commercial International Bank.

Market closings:

Saudi Arabia: Flat at 10,778 points.

Abu Dhabi: Up 0.5% at 10,161 points.

Dubai: Up 0.3% at 5,987 points.

Qatar: Up 0.2% at 9,659 points.

Egypt: Up 1.2% at 55,499 points.

Bahrain: Down 0.3% at 1,924 points.

Oman: Up 0.7% at 7,603 points.

Kuwait: Down 0.4% at 9,244 points.


Syrian Energy Minister Revises Fuel Prices, Announces Subsidized Diesel

A fuel station in Damascus displays prices following a recent increase that sparked protests in several Syrian cities. (Reuters)
A fuel station in Damascus displays prices following a recent increase that sparked protests in several Syrian cities. (Reuters)
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Syrian Energy Minister Revises Fuel Prices, Announces Subsidized Diesel

A fuel station in Damascus displays prices following a recent increase that sparked protests in several Syrian cities. (Reuters)
A fuel station in Damascus displays prices following a recent increase that sparked protests in several Syrian cities. (Reuters)

Syrian Energy Minister Mohammed al-Bashir announced on Thursday that subsidized diesel would be sold at 115 Syrian pounds per liter, saying the ministry had approved practical measures to ease the burden on citizens while maintaining supplies.

Speaking at a news conference with Syrian Petroleum Company Chief Executive Youssef Qablawi on developments in the oil sector, Bashir said several grades of diesel would be offered at different prices and specifications to reduce living costs.

He also said several small local refineries would be restarted under the management and supervision of the Syrian Petroleum Company, with a combined capacity of up to 35,000 barrels of crude oil per day.

The Permanent Committee for Pricing Petroleum Products and Mineral Resources issued a temporary price list for petroleum products on Sunday. Syrians were caught off guard by the decision, which raised prices by between 25% and 40%, reflecting regional and global developments.

The decision triggered widespread public anger, particularly in eastern and northern Syria, where residents face complex economic, administrative, security and living conditions. Concerns have mounted that higher fuel prices will further increase already steep everyday expenses.

Bashir said at the news conference, carried by the state news agency SANA, that he met President Ahmed al-Sharaa on Wednesday to discuss practical alternatives.

They approved a proposal to offer several grades of diesel at different prices and specifications according to their intended use, rather than limiting the market to a single, high-grade and costly product, he said.

“We recognize that higher energy prices have a direct impact on people’s livelihoods and on the agricultural, production and service sectors,” Bashir said.

“Our responsibility is not limited to securing petroleum products. It also includes seeking solutions that ease the burden while maintaining continuity of supply.”

Bashir said subsidized diesel priced at 115 Syrian pounds per liter would be allocated primarily for heating, agriculture and groups eligible for government support.

Diesel meeting specifications suitable for transportation and for production and service-sector uses would be offered at 150 pounds per liter, he added.

The minister said crude petroleum products cost less than finished products. Syria spends about $140 million a month purchasing gas for power generation to meet the needs of its electricity plants, he said.

Syria imports 5.3 million cubic meters of gas per day from several countries, Bashir said, adding that the state treasury could not bear additional costs.

He said accumulated electricity-sector debt and losses from petroleum products had affected investment projects and capital spending. Unpaid electricity bills and illegal connections to the power grid had also increased losses at the Syrian Electricity Company.

“The state has adopted a policy of moving from a socialist economy to a free-market system, and we recognize the difficulties that this entails,” Bashir said.

“The return of the Baniyas refinery to operation and an increase in domestic production will have a positive effect on petroleum product prices.”

Qablawi said the Syrian Petroleum Company had begun preparing an implementation plan for the measures after discussing the relevant mechanisms with the Energy Ministry.

The company had spent the previous period studying the technical and operational details and working to remove potential obstacles to ensure smooth implementation, he said, according to Syria’s state-run Al-Ikhbariya television.

Qablawi said he hoped implementation would begin in the coming days, depending on technical and administrative readiness, adding that further details would be announced gradually.

Only designated fuel stations in the provinces would sell products processed by the small local refineries, he said.

The pricing committee issued its new temporary price list on Sept. 13.

The Energy Ministry later said the increase in Syrian petroleum product prices resulted from an exceptional rise in global procurement costs coinciding with a comprehensive overhaul of the Baniyas refinery.

It said the adjustment was temporary and intended to maintain supplies and ensure that petroleum products remained available on the domestic market.

Syria has been affected by higher global procurement costs for gasoline, diesel and fuel oil at a time when the Baniyas refinery is undergoing an overhaul expected to last about two months, temporarily increasing the country’s reliance on imported finished products.


Gold Rises as Traders Reassess Positions after Fed Rate Hike, Oil Rally Eases

Gold bracelets and necklaces displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)
Gold bracelets and necklaces displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)
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Gold Rises as Traders Reassess Positions after Fed Rate Hike, Oil Rally Eases

Gold bracelets and necklaces displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)
Gold bracelets and necklaces displayed for sale at a gold shop in Istanbul's Grand Bazaar (AFP)

Gold climbed more than 1% on Thursday as a softer dollar and easing oil prices lent support, while investors assessed the Federal Reserve's latest rate hike and prospects for further policy tightening.

Spot gold was up 1.2% at $4,312.05 per ounce, as of 0848 GMT, after hitting a near six-week low on Wednesday. US gold futures for December delivery were down 0.8% ‌to $4,351, said Reuters.

"I suspect ‌the market may have gotten itself over ‌positioned on ⁠the expectation of ⁠a rate hike, as the likelihood grew. And now that it's happened, those positions are being squared out," said independent analyst Ross Norman.

Meanwhile, the dollar eased from a seven-week high, making greenback-priced bullion more affordable for holders of other currencies, while oil prices extended their fall on diminishing fears of supply disruptions.

The Fed raised ⁠rates on Wednesday and flagged more hikes ‌in the coming months, with new ‌chief Kevin Warsh joining a unanimous decision that effectively acknowledges the Trump administration's ‌inability so far to control inflation that policymakers worry could ‌worsen.

Although gold is considered an inflation hedge, a high interest rate environment reduces its appeal by boosting the attractiveness of interest-bearing assets.

The Bank of England looks set to keep rates on hold on Thursday, while ‌the Bank of Japan could raise interest rates to a 31-year high on Friday.

"The Fed ⁠is tightening ⁠policy at a time when inflation is being driven primarily by energy prices and supply shocks, meaning higher interest rates could weaken growth without quickly resolving all price pressures," said Linh Tran, Market Analyst at XS.com.

"This environment remains supportive of demand for gold as a hedge, particularly while geopolitical uncertainty persists."

Spot silver rose 1.4% to $63.83 per ounce, platinum firmed 1.2% to $1,772.19 and palladium climbed 1.8% to $1,291.89.