Saudi Arabia’s real estate price index experienced a 1.7 percent increase in the second quarter of 2024 compared to the same period last year, largely driven by rising costs in the residential sector, according to official data from the General Authority for Statistics (GASTAT).
The housing sector saw a year-on-year price increase of 2.8 percent in the second quarter, primarily attributed to a 2.8 percent rise in land plot prices. The development of the residential sector is vital for Saudi Arabia’s economic diversification as the Kingdom positions itself as a tourism and business hub.
The real estate industry in Saudi Arabia is one of the fastest-growing sectors in the Middle East, with market volume projected to reach $69.51 billion in 2024 and $101.62 billion by 2029, reflecting an estimated compound annual growth rate of 8 percent, as reported by the Real Estate General Authority.
GASTAT emphasized that the residential sector’s significant weight in the overall index greatly influenced the increase in the general index. In particular, apartment prices rose by 2.9 percent year-on-year during the second quarter.
Conversely, the commercial real estate sector experienced a decline, with prices decreasing by 0.4 percent year-on-year, primarily due to a similar drop in commercial land plot prices. The report noted that prices for commercial buildings and centers remained stable during the second quarter, showing no significant relative change.
Additionally, agricultural land plot prices rose by 1.5 percent year-on-year in the second quarter.
When compared to the first quarter of 2024, the real estate price index increased by 1.1 percent in the second quarter. GASTAT reported that the quarterly index was influenced by a 1.6 percent rise in residential sector prices, driven by a corresponding increase in residential land plot prices.
In terms of quarterly changes, apartment prices rose by 2.1 percent, while villa purchasing costs saw a slight increase of 0.1 percent. The commercial sector-maintained stability, with no significant relative changes observed in the second quarter compared to the first quarter. Agricultural land prices also experienced a 1.6 percent increase in the second quarter relative to the first.
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