RESIDENTIAL
was disruption to the planning process due to the November floods. Te report stated household demand was recovering along with the economic cycle so researchers at JLLS expected rental and sales values to remain relatively stable in the short term, before increasing over the 18-24 month timeframe. Te report for 2010 said the Jeddah residential market remains dominated by small developers and individual owners, with the larger developers delivering just 2,010 additional units to the residential market last year. According to the report, residential prices were generally flat in Jeddah
during the adverse economic conditions of 2009 and districts to the south and east of the city have reported declines in the first half of 2010 as a result of last November’s floods. Research from local bank Saudi Fransi revealed a mixed picture of
residential price movements. Apartment prices in Central and Southern Jeddah declined by 4-9% over the past six months, while prices increased marginally in the more affluent areas to the north of Jeddah. Villa prices in north Jeddah are also reported to have increased over the past six months (during H1 2010).
Outlook for 2011 Mr Soraka Al-Khatib, Co-Head KSA JLLS, says the focus of Jeddah’s
residential market will remain on the low to middle income sector, with Jeddah expected to receive a significant proportion of the 500,000 additional affordable housing units announced as part of the stimulus package announced by the King in March 2011.
“Tere are no public figures on how many low to middle income units
were completed over the past year but these would account for the vast majority of all residential completions. “Most of these units would be within small – micro projects of less than 10 dwellings. Te market for upper income products has been boosted by the recent announcement that developers can sell their units ‘off plan’ prior to completion. Te luxury sector does however remain relatively limited, with JLLS expecting less than 1,000 units to be added to the stock in this sector in 2011. Among the major luxury projects currently under construction are Lamar and Al- Jawhara,” Mr Al Khatib said. In contrast to the office market, Mr Al Khatib said residential rentals are
expected to increase in 2011. “Given the strength of demand to rent units in Jeddah, it is likely that the recent stimulus package will add pressure for rents to increase over their current levels of SAR 35,000 - 45,000 per annum. Demand for luxury apartments is focused on the Corniche area, while popular locations for mid to low income housing include new suburbs in the North East and South East of the city. We will see more focus from developers on apartment projects than villas (since they are more affordable and can be developed at prices more aligned with the average income levels of the Jeddah population). “Te recent economic stimulus package will boost both the short term demand for affordable housing (by increasing employment and wage rates) and also the long term supply of this housing across Jeddah.” However, Mr Al Khatib emphasized the pressing issues of the mortgage law. “Further delays will continue to limit the potential demand for more up market products” l
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