Analysis - Abdul-Hamid Al-Omari
The weekly activity of the local real estate market improved, to record a weekly increase in the total value of its deals by 13.2 percent, compared to its increase during the previous week by 1.9 percent. The total value of market deals by the end of last week settled at the level of 3.7 billion riyals, and this increase is due to a greater extent to the increase The record, which was achieved during the past week for the commercial sector, whose weekly deals recorded an increase of 51.8%, after two consecutive weeks of decline, which dominated the sector's activity, so that the value of the sector’s deals stabilized by the end of last week at below the level of 1.0 billion riyals. (26.6 percent of the total value of weekly real estate deals). The residential sector, whose weekly deals rose 5.0 percent, compared to 12.3 percent in the previous week, to settle at the end of last week at 2.5 billion riyals (66.9 percent of the total value of weekly deals in the real estate market). While the value of agricultural and industrial sector deals recorded a decrease of 8.3 percent, compared to a record decline during the previous week of 30.7 percent, so that the value of the deals of the two sectors stabilized by the end of last week at the level of 242 million riyals (6.5 percent of the total value of weekly deals in the real estate market).
As for the other indicators of the weekly performance of the local real estate market, the number of real estate deals recorded a weekly increase of 7.8%, compared to a rise during the previous week of 3.5%, so that the number of deals by the end of the week settled below the level of 6.6 thousand real estate deals, and included the weekly increase in the number of deals. All major sectors of the market, with an increase in the number of housing sector deals by 5.6%, an increase in the number of commercial sector deals by 22.4%, and finally an increase in the number of deals in the agricultural and industrial sectors by 12.4%.
The number of properties sold during the past week increased by 12.6 percent, compared to its increase during the previous week by 2.0 percent, to settle by the end of the week at a level below the level of 7.1 thousand properties sold, and the weekly increase in the number of properties sold included all major sectors of the market, with the increase in the number of properties sold for the sector The number of properties sold to the commercial sector increased by 11.1 percent, and the number of properties sold to the agricultural and industrial sectors rose by 12.2 percent.
As for the total area of real estate transactions executed during the past week, it recorded a record weekly increase of 24.6%, compared to its highest rise during the previous week of 47.1%, to settle the total at the level of 55.2 million square meters, and the increase in the areas of real estate transactions executed focused on each Of the commercial, agricultural and industrial sectors, while a decline was recorded for the residential sector, as the area of transactions executed for the residential sector recorded a decrease of 15.0%, while a record high was recorded for the commercial sector 132.8%, and an increase for the agricultural and industrial sectors by 27.3%.
Index of paid rent for housing
The latest index measuring the index of rent paid for housing showed an annual decline of 2.4 percent by the end of December 2020, and an annual decrease of 1.8 percent from the fourth quarter of this year, bringing its annual decline during 2020 to about 1.0 percent, compared to its level during 2019. , Which is the fourth annual decline in a row, as it recorded an annual decline during 2019 by 10.2 percent, and recorded an annual decline during 2018, which reached 3.5 percent, and it recorded an annual decline during 2017, which reached 0.9 percent.
Although the total decline in the index of rent paid for housing during the period from 2017 to 2020 reached 15.0 percent (annual average of -4.0 percent), it is incomparable to the size of the increase recorded during the period from 2006 to 2016, which reached 109.0 percent (An annual average of 6.9%). However, it is expected that the decline in housing rents levels will continue about the increase in the transfer of families from their previously rented housing to their new ownership homes, which will double the expected pressures on the market prices of various real estate assets, which recorded their return to The rise again from the beginning of 2019 to date, benefiting primarily from an unprecedented increase in real estate loans to individuals, whose size during 2019 and 2020 exceeds a ceiling of 220.2 billion riyals.
The real estate price index
The general price index of real estate prices at the end of the fourth quarter of 2020 showed an annual decrease of 0.3 percent, compared to its level during the same quarter of 2019, while it recorded an increase, compared to the third quarter of the same year, 0.1 percent. As for the residential real estate price index, it recorded an annual increase of 0.5% by the end of the fourth quarter of 2020, and a quarterly increase, compared to the third quarter of the same year, by 0.2%, while the commercial real estate price index for the same period recorded an annual decrease of 1.9%. , And also recorded a quarterly decline, compared to the third quarter of the same year, 0.1 percent.
As for the performance of these indicators during 2020, the general real estate price index recorded an annual increase of 0.5%, the residential real estate price index recorded an annual increase of 1.6% during the same period, while the commercial real estate price index recorded an annual decrease of 1.6%. As for the price index for the agricultural sector, it recorded a slight annual increase that did not exceed 0.2 percent.
