*Analysis: Abdul Hamid Al Omari
The local real estate market has benefited from the sale of a commercial property in the city of Jeddah that worth 1.0 billion riyals, which was accounted for about 28 per cent of the total value of weekly deals for the market, recording a 15.4 per cent increase in the value of its weekly transactions, compared to a 9.6 percent fall in the previous week.
The total value of real estate transactions at the end of the 19th week of this year reached 3.6 billion riyals, compared to the previous level of 3.1 billion riyals.
The weekly performance of both the residential and commercial sectors varied.
The total value of residential sector deals continued to decline for the fifth week in a row by 19.8%, compared to a 3.4 percent fall in the previous week, with the total value of transactions settling at the end of last week at below 2.0 billion riyals.
While the total value of transactions in the commercial sector rose by a record 147.9 per cent, compared to a decline of 27.3 per cent in the previous week.
The total value of transactions at the end of last week reached 1.6 billion riyals.
As noted in the previous weekly reports, the local real estate market is increasingly affected during the current period week after week with many factors linked to seasonal factors, as the market enters the holy month of Ramadan and the summer months, during which the activities and transactions of the real estate market.
In addition to that, there is a gradual decline of the incentives, which have significantly increased the levels of liquidity of the real estate market in recent months, and positively affected by the increase resulting from the increase in the volume of real estate finance granted by banks and private financing institutions specifically and the extension of its effective impact on the levels of market prices due to the increase in loans granted to the military segments.
All of which have been reflected in the total directly on the rise in real estate activity.
The market price levels of various real estate assets over the past few months and the market is witnessing a decline in the impact of those variables during the current period, and is expected to increase during the second and third quarters of this year.
On the level of analysis of local real estate market performance indicators, the TASI Index rose 0.13 percent, compared to a decline of 0.14 percent during the previous week.
There was no significant change in the market value of these funds, with an average loss of 16.7 per cent at the end of last week (only two funds with a market price higher than the subscription price, as opposed to 15 real estate funds with market prices below the IPO price).
The net loss of the bank reached SR 2.4 billion at the end of last week compared to its capital at the time of the offering.
While the volume of banking facilities granted to these funds and Sukuk remains stable at 5.6 billion riyals (38.8 per cent of its capital, 46.6 per cent of its market value) and the stability of the number of real estate funds borrowed or issued Sukuk in nine funds out of 17 real estate investment funds in circulation.
Weekly performance of the real estate market
The local real estate market recorded a 15.4 per cent rise in the value of its weekly transactions, which is taking advantage of the implementation of the sale of a commercial property in the city of Jeddah (Al-Andalus district) with a total value of SAR 1.0 billion (28 per cent of the total value of weekly market transactions) to settle at the end of the 19th week of this year at the level of 3.6 billion riyals, compared to a 9.6 percent fall in the previous week.
The weekly performance of both the residential and commercial sectors,
The total value of residential sector deals continued to decline for the fifth week in a row by 19.8%
Compared to a 3.4 percent fall in the previous week varies, as the total value of transactions settling at the end of last week at below 2.0 billion riyals.
While the total value of transactions in the commercial sector rose by a record 147.9 per cent, compared to a decline of 27.3 per cent in the previous week, which is benefiting the sector from the sale of commercial real estate located in the city of Jeddah (Al-Andalus district) with a total value of 1.0 billion riyals (62 per cent of the total value of transactions in the commercial sector) with the total value of transactions in the commercial sector at the end of last week at the level of 1.6 billion riyals.
At the level of reading the rest of the weekly performance indicators of the real estate market, the number of real estate transactions fell by a record 31.4 per cent, compared with a weekly rise of 1.4% to settle at 4282 real estate.
The number of properties sold also fell by a record 31.6 per cent, compared to its previous weekly rise of 2.7 percent to settle at 4444 selling properties, which reflect the change, whether reversing the change in transaction values or in lower proportions if they are consistent in the same direction.
The continued decline in the inflated market price averages of the various movable real estate assets.
This is very positive, which will strengthen its continuation (lower prices, higher deals and sales) than the exit of the local real estate market from the severe recession, which they are subject to for several years and in turn contributes to the exit from the crisis of the difficulty of land and housing ownership for members of society, under the umbrella of falling inflated prices for various real estate assets.
The real estate transactions recorded an increase of 4.2 per cent compared to a rise of 23.8 per cent in the previous week to 21.8 million square meters.
Land and real estate price trends
The short-term price trends shown by the changes in the previous period of the current year for the average prices of land and residential properties on the level of change in average market prices of residential real estate, comparing the period from the beginning of this year to the date of 9 May with the same period last year.
The results were as follows: the average market price of residential villas fell by 18.5%, the average market prices of residential apartments decreased by 10.0%, while the average market price per square meter of residential land was up by 22.4 per cent.
This variation in market price changes between villas and apartments on one side, and residential land on the other hand.
There is a significant increase in the supply of vacant and new housing units, in contrast to the contraction of the supply of residential plots and the absence of any pressures during the current period on their owners that can contribute to the supply side at market prices, or to develop and benefit from them.
On the level of change in average market prices of residential real estate during the previous 12 months as of May 9 of this year, compared to the same period last year, the results are as follows: annual decline of average market prices for residential villas by 14.3%, then an annual decline of the average price of residential apartments by 12.4%, while the average market price per square meter of residential land recorded an annual increase of 10.4 per cent.
Regarding the long-term price trends, there is a decline in all the average prices of land and residential properties until the date of May 9 of this year, compared to the annual average market price of land and real estate for 2014 (peak property).
The results were as follows: the average market prices of residential villas decreased by 36.6%, the average market price per square meter of residential land during the comparison period decreased by 25.4 per cent, then the average price of apartments fell by 23.4%.
