A well known real estate company in the Middle East studied the updated situations of the property market and submitted a report Saudi Arabia property market in 2020 including all the property data, and the related trends of the KSA real estate sector. This report consulted and executed by Cavendish Maxwell’s research and strategic consulting team.
The key market insights
The Gross Domestic Product (GDP) of Saudi Arabia increases by 0.8% compared by 2018, as the current prices in 2019 were SAR 2,973.6 billion. According to the International Monetary Fund, Saudi Arabia’s economy is forecast to contract 2.3% in 2020 but bounce back in 2021, growing 2.9%.
The lower oil price caused to decrease the Foreign Direct Investments (FDI) flows, However, inflows steadily recovered owing to economic diversification efforts which have seen new projects launched outside the oil and gas sector. The FDI increase in 2019 to reach SAR 17.1 million, rising 7.4% compared with the same period in 2018 to stand at SAR 15.9 million.
In Q1 of 2020, the real estate prices in Saudi Arabia increased by an average of 1.2 % compared with the same period of the year before 2019, also the residential properties increased by around 2.1%. However, the restriction imposed towards the end of March affected the KSA market, especially the real estate market, which caused the economic recession after the recovery due to COVID 19.
As a result of the epidemic, the residential and commercial real estate sector declined by 0.5% compared with the same quarter year ago, the government starts to encourage the private industries intensification, Although they reviewing their real estate requirement and expansion plan in the region because of the epidemic.