Riyadh- Saudi real estate deals dropped 11% in the first month of 2017 compared to the same period of last year. These results are because of the reluctance in the real estate segment due to government pressures on the sector in order to regulate prices.
The fall in deals influenced the value of properties that are struggling to get out of inflation after the value increased 100% during less than one decade.
Managing Director of Al Baz Real Estate Est Khaled Al Baz stated that the sector is still witnessing a relapse in performance due to the huge gap between buyers’ ability and sellers’ offers. Also, the Ministry of Housing has interfered though providing unprofitable housing units.
All these factors, according to Baz, stand behind the severe recessions in the sector passing through a corrective period on all sectors.
“Sales are dropping in anticipation of a further fall in prices in order to cope with the buyers’ ability especially amidst the performance of recent years when the sector’s supply surpassed the demand,” added Baz, expecting more changes this year.
Investor Khaled Abdulatif pointed out that there is a drop in value due to decrease in demand but the drop is not sufficient to push the real estate sector towards reviving. The reduction percentage is unclear and varies from one place to another but does not exceed 20% or go below 10%.
Abdulatif added that if the market situation remains unchanged then this might positively affect the ability of buyers who previously held back from purchasing due to the unaffordable properties whose prices reached lately record-levels of inflation.