J. LL Group ,the world's largest collections of investments and real estate consulting, issued, today its annual report on Saudi Arabia real estate markets during 2015, which reviews the latest trends of the , office andresidential, commercial and hotel segments of these markets. In the light of, how the Saudi macroeconomic is affected by oil prices decline as well as the government spending. Also, this report confirmed that the performance of the real estatemarkets of Riyadh are stable, meanwhile Jeddah markets of real estate the momentum of its growth during 2015.
Commenting on the report of the real estate marketsin the cities of Riyadh and Jeddah, Mr. Jamil Ghaznavi, National Director and Chairman of J. LLOfficein Saudi Arabia, said: "We have seen a change in the nature of demandin the residential segment of the Saudi real estate market in both Riyadh and Jeddah, as we noticed a shift from buying to hiring. The number of residential propertytransactionsincreased by 5% in the year to November 2015 comparable to the same period of the previous year. we expectcontinueddemand for rental residential property during 2016but at a slower pace, we don't expect that the purchasemarket may witness a resounding change during the same year. But this situation could change once the spread of the systems of white lands law is achieved.
Then, , Mr. Jamil Ghaznavi explained saying: "low oil prices put pressure on economic growth, andcash flow, and government budget, and equity markets, and asset prices in the UK; This situation led to the reduction of the subsidy and government spending, and also impact on the financing of real estate projects.
Also, this situation affected the financing of real estate projects. Consequently, we began to see a more selective approachfor these projects with an increasing focus on the important projects in the infrastructure sector, and housing projectsaffordable. on the other hand, spending on projects declined , this led to the delay or cancellation of many projects.
"Then he continued saying:" while opening new hotels in Riyadh this year, the daily rate of return hotel rooms and ratesof occupancy may be exposed to the descendingpressure; dueto the growing competition in this segment. However, we expect the marketJeddahhotels keep its relatively stable over the medium term. Although, there is new supply of Jeddahhotels, there is a strong demand to absorb the new supply of hotels as a result ofreligious tourism, and high occupancyratesduring school and public holidays.
"Finally, he added : "Fortheofficesegment of the market, Jeddah witnessed continued strong growth in conjunction with the high-quality of office units which came lately to the markets. On the other hand, office rentsstabilized to some extent in Riyadh.
