According to the government’s plan to increase home ownership by building affordable housing and offering cheap loans, Saudi Arabia’s apartment prices rose at the fastest pace in five years.
Riyadh’s capital and Jeddah’s Red Sea port city have seen apartment values rise 17% and 12% respectively over the past 12 months, according to Knight Frank data.
“Home ownership has actually become more affordable since the launch of the National Transformational Plan,” said Faisal Durrani, head of Middle East research at Knight Frank, referring to Crown Prince Mohammed bin Salman’s plan to wean the economy off oil. “Two-bedroom apartments for instance, on average, cost 2.4 times annual incomes, compared to a multiplier of 2.7 back in 2016, well within globally accepted affordability thresholds.”
One reason why single-family home prices aren’t rising as quickly as apartments is that they typically cost seven to 12 times an annual income, Durrani explained.
From about 60% today, the kingdom aims to increase home ownership to 70% in 2030.