According to JLL’s Q3 2023 real estate market overview, 14,000 new residential units will be added to Saudi Arabia’s two largest cities, Riyadh and Jeddah, in the final quarter of 2023.
8,000 new homes are anticipated to hit the market in the capital, while 6,000 more will be built in Jeddah between October and December.
In the third quarter, 12,400 additional residential units were added to the market, bringing the total number of residential units in Riyadh and Jeddah to 1.4 million and 875,000 units, respectively.
In the third quarter of 2023, year-over-year (YoY), prices and rentals in Riyadh increased by 7% and 3%, respectively, due to the city’s growing demand as a regional hub.
Demand was still being driven by apartments, whose sale prices increased 9% year over year in the third quarter. During this same time, rentals also saw a 6% YoY increase.
Simultaneously, Jeddah’s residential market saw comparable growth.
In the third quarter, Jeddah’s average sale prices showed a 7% YoY yearly increase, while rents increased by 5% YoY.
However according to JLL, the affordability of apartments has begun to suffer from growing borrowing costs and residential real estate prices.
Data from January to August 2023, published by the Kingdom’s Real Estate General Authority, showed that the volume of transactions decreased by 2% and 25% year over year in Riyadh and Jeddah, respectively.