Saudi Arabia has signed agreements and memorandums of understanding for more than 10 billion Saudi riyals (USD 2.66 billion) to establish four investment funds to build commercial, tourism, and residential projects.
The construction and real estate development field will also receive some of the investments. The real estate funds were not further described.
The agreements were inked in Riyadh at the Real Estate Future Forum in the presence of Majed bin Abdullah Al-Hogail, Minister of Municipal, Rural, and Housing.
Abdullah Al-Hogail said in his introductory remarks that the Saudi real estate industry was one of the foundational pillars of the country’s economy, and so had public backing from wise leadership.
He said the Kingdom was eager to organize and grow the industry, enhance oversight procedures, boost its effectiveness, stimulate investment in it, and enable it to increase its GDP contribution.
This year’s forum focuses on ten strategic areas, and some of the most crucial among these is the role of regions, governorates, ministries, and secretariats in coordinating the empowerment of the real estate sector, the impact of regional efforts on the expansion of the real estate sector in the region. The future of real estate investment, real estate regulations between implementation and oversight, and the private sector between regulations and empowerment in the real estate sector.
The Kingdom will experience consistent property market expansion, supported by Vision 2030 and the Iskan program, according to global rating agency S&P Global Ratings in December 2022, with USD 1 trillion set aside for real estate and infrastructure projects.
Real estate prices in the Kingdom increased by 1.6% in the fourth quarter of 2022, mostly driven by a rise in residential property prices, according to the General Authority for Statistics.
According to the GASTAT’s Real Estate Price Index for the fourth Quarter of 2022, the rates of residential property increased by 2.6% as the price of plots in the Kingdom rose by 2.7%.
While the villa prices also increased by 1.7%, the apartment values rose by 2.2%. Housing costs in the Kingdom have led to a 3.3% rise in the annual inflation rate in December 2022.
In the commercial sector, real estate prices decreased by 0.2% after the prices of commercial plots of land dropped by 0.2%. Exhibition prices also decreased by 2.3%, while the rates of commercial centres went up by 0.1%.
Meanwhile, agricultural land prices dropped by 0.8%. GASTAT is the only official statistical reference for statistical data and information in Saudi Arabia.