Riyadh – Mubasher: Major KSA cities have witnessed a shift in demand from sales to rentals in 2015, with rents projected to continue rising in 2016 but at a slower rate than last year, said research firm Knight Frank in its newest report.
The company said that limited affordability and the low penetration of home financing resulted in the rising demand for rental property during 2015.
“The decision to impose a 2.5% white land tax on undeveloped.
property, in addition to revisions in the mortgage law (increasing the loan-to-value ratio to 85%) are expected to revive demand for the sales market across the Kingdom in 2016,” the report stated.
The Saudi housing ministry currently has 187 affordable projects in the pipeline that are expected to provide 233,651 units in the Kingdom, according to the report.
It is expected that 2016 will see “a more selective approach to the development of residential real estate projects,” Knight Frank noted, indicating that lower oil prices, reduced market liquidity and a tightening budget are likely to prompt the re-prioritisation of projects.
Direct emphasis will likely be given to the delivery of affordable housing and other critical infrastructure.
