Saudi Arabia is expected to continue becoming a key destination for residential buyers as gross rental yields in the Kingdom’s main markets exceed other cities in the Gulf region, reveals Sakan’s inaugural Saudi Arabia Residential Property Report Q3 2024.
Analyzing Q3 data, Sakan, the leading GCC real estate online platform, found that rental yields in Riyadh for a 2-bedroom and 3-bedroom apartment averaged 9.1% and 10.1%, respectively. In Jeddah, a 2BR apartment’s rental yield averaged 11.7%, or double that of Doha, Dubai, and Abu Dhabi, while a 3BR averaged 9.7%.
These returns suggest significant demand for rental properties that push up rates faster than selling prices. Apartment rental prices in July increased by 12% year-on-year, according to the government. Meanwhile in Q3, residential property prices grew slower (1.6%) than the Real Estate Price Index overall (2.6%), according to data from the General Authority for Statistics.
Abdullah Al Saleh, CEO of Sakan, says: “We are pleased to launch our first residential real estate report at Sakan, which highlights the key themes shaping Saudi Arabia’s property sector and the state of apartment and villa sale and rental in Q3. Proptech and transparency go hand in hand, and this report is our contribution to foster greater levels of transparency and provide information that will help customers make informed decisions in real estate.”
Homeownership in Saudi Arabia is estimated to hit 70% by 2030, with close to 5 million housing units required during this period.
To support homebuyers, mortgage policies have been eased from 85% to 90% loan-to-value cap for citizens in 2018. The Saudi Government also introduced a residency scheme for foreign owners with at least SAR 4 million property.
A mid-sized villa (351-600 sqm) in Riyadh cost SAR 3 million and in Jeddah SAR 1.8 million in median price. Central Riyadh has the most expensive median selling price for a mid-sized villa at SAR 5.7 million. Riyadh’s gross rental yield averaged 5.3% and Jeddah’s at 5.2% in Q3.
Meanwhile, an average 2BR apartment in Riyadh cost SAR 848,740 and in Jeddah SAR 379,560 in Q3. North Riyadh has the most expensive median price for a 2BR apartment at SAR 1,088,000.
The Saudi Arabia Residential Property Report Q3 2024 will be launched by Sakan during the Cityscape Global 2024 in Riyadh on November 11-14. Download the English version of the report from https://join.sakan.co/Sakan-Report-Q3-2024-En
