JEDDAH — Despite challenging market conditions, various government initiatives aimed at boosting Saudi home ownership and government focus on the real estate sector as part of the economic diversification process is encouraging.

Raya Majdalani, Research Manager at Knight Frank said “the residential market remains under pressure as the rising affordability challenge and the lack of suitable supply for middle and lower tier buyers continue to weigh on the sector. In H1 2019 we have seen as significant pick up in transaction volumes across key cities which indicates that the market may be heading towards the bottom of its cycle.”

The Sakani scheme is put in place to tackle the rising affordability challenge and is driving substantial construction activity in the market. The scheme and the efforts to expand the mortgage market are expected to alleviate pressures in this area.

Knight Frank in its Saudi Arabia Residential Market Review 2019 report noted that the Saudi Arabian residential market prices appear to have remained under pressure in the first half of 2019, while transaction volumes have picked up significantly across key cities, indicating that the market may be heading towards the bottom of its cycle.

The report said housing affordability in Saudi Arabia is a rising challenge with a growing urban population and the provision of housing stock to low and middle tier buyers.