Global real estate advisory firm Alpha1Estates said that its real estate index for Makkah and Madinah had decreased by 7.6 % in 2020, as the COVID-19 pandemic and global lockdown took the travel to the Holy Cities to a halt.
Whilst the Saudi market’s major Tadawul All Share Index (TASI) raised to 3.6 percent in 2020, the real estate index in reality fallen down by 3.6%, and the Ihsan al-Haramain Index, the index used to simply track Saudi-listed companies contain in real estate development in Makkah and Madinah, decreases by 7.6 percent, showing a 10% underperformance with the market.
‘Despite the COVID-19 pandemic, global lockdown and global travel coming to a standstill in 2020, the fundamentals of demand for real estate in the Holy Cities meant that the impact, albeit significant, was in the short and medium-term, as the fourth-quarter opening allowed the sector to make some recovery,’ said Talal Mahmood Malik al-Alawi, Chairman and CEO of Alpha1Estates.
In the meantime of the lockdown in Saudi Arabia, orderly access and prayers to the Prophet’s Mosque were stopped for over 70 days from March to May 2020. Orderly access to the Grand Mosque in Makkah was stopped, whilst Hajj was carried on by around 1,000 believers in July and Umrah came to an end for over 200 days from March to October 2020.
Alpha1Estates International, launched in 2006, became the world’s first company to market Saudi Arabian property all around the globe and also the first company to market property in both Makkah and Madinah.