Outlook of Riyadh’s residential sector remains positive: KPMG
Riyadh - Arab Today
KPMG Saudi Arabia, claimed as the world’s leading audit and advisory firm, here forth represented by its real estate team, recently released its comprehensive study “Riyadh Real Estate Market Overview” highlighting the economic and demographic trends in Riyadh’s residential, retail, office and hospitality sectors.
According to the findings in the report, demand has remained robust for apartments and small-sized villas within the sector while sale prices of apartments and villas subdued in 2015. The waiting period in residential compounds ranged between two to six months, with the highest waiting period being in class B compounds. On the occupancy front, market wide figures touched 87 percent with steady increase of 3-5 percent year on year over the past three years.
The overall outlook of Riyadh’s residential sector will remain positive. The report also highlighted that the recently announced white land tax on undeveloped residential and commercial urban land would free up developable land and boost tax collection.
Focusing on the retail sector, the report indicated that current retail mall stock stands at approximately 1.5 million sqm. The sector also experienced marginal growth of 2 percent in rentals and occupancies compared to 2014 as the market went through a consolidation phase during this period.
The demand for retail space in Riyadh is likely to remain healthy in the next 2 to 3 years despite the sector having the likelihood of an additional supply of more than 1 million sqm. Moving forward rentals and occupancies are likely to remain steady.