Medina, Asharq Al-Awsat—Property prices in Medina, in northwestern Saudi Arabia, have risen 70 percent over the past three months, according to the most recent estimates from real estate agents in the city.
They are speculating that the announcement a year ago that the Prophet’s Mosque would be expanded is contributing to the rise. Growth in the Medina property market prior to the announcement kept pace with that in the rest of the Kingdom, but is not outpacing it by a fair margin.
Real estate analysts are expecting the market will continue to soar over the next five years.
Ghazi Qutb, who heads the Real Estate Commission at the Chamber of Trade and Industry in Medina, told Asharq Al-Awsat that the main reason for the increase in property prices is the lack of land put up for sale.
Extensive development work is taking place in Medina, a city of 2.62 million people, to keep pace with the city’s growing population. The city’s population is currently estimated at 2.62 million.
In addition, nearly 12.2 million people visit Medina each year. As Islam’s second holy city, after Mecca, Medina plays host to the 3 million pilgrims who travel to Saudi Arabia annually to perform the Hajj (major) and Umrah (minor) pilgrimages. Part of the ongoing development plan for the city involves constructing facilities for those visitors, which is also contributing to rising property prices.
Authorities are now working to cope with the rapid growth in construction, in a city with only 113 square miles (293 square kilometers) of developed space.
Qutb added that the 70 percent increase in the price of land in the past three months is a result of the lack of clarity that surrounds the mosque expansion project, saying that authorities have still not announced which tracts of land will be cleared for the expansion or how much the owners of that land will be compensated.
According to Medina’s Development Authority, there is sufficient land to meet the requirements of both residents and visitors over the next 30 years. The authority added that a more focused and organized development plan is needed.
The authority is already working on the anticipated high demand on services and facilities near the Prophet’s Mosque. This will require work towards opening new parks, improving infrastructure and social services, and developing better transport links for residents, visitors and commodities.
Qutb has called on the municipality to act quickly in organizing the Prophet’s Mosque development project, saying the city needs to have strict control over the process for acquiring the land needed and the process with which it deals with the current owners of that land.
But realtors in the city seem ready to capitalize on the expansion project. One Medina realtor, Ali Ahmed, told Asharq Al-Awsat that he expects property prices to rise even more dramatically across the city. Another, Ahmed Mubarak, said that only a clear and controlled development plan from the city could contain property prices.