The real estate sector in Saudi Arabia is facing challenges, with a 32% decline in the value of real estate transactions within a week. This contraction has been attributed to the significant decrease in land and villa transaction values, which has led to historically low transaction values. High mortgage interest rates have also been a contributing factor.
Real estate experts believe that the decline in prices may continue, making properties more accessible to a wider range of buyers. There is concern that the cumulative decrease in transaction values could result in price reductions, particularly for investors looking to exit the market or those who have been financially affected by the economic conditions.
Additionally, the rise in mortgage interest rates has made mortgage loans less appealing to potential buyers. The challenge lies in the increasing property values, which have become unaffordable for many aspiring property owners. This situation has led to a decrease in launching new real estate projects, with a focus on selling existing properties in the market.
Over the past decade, the total market value of traded properties in Saudi Arabia has reached a significant sum. However, current market conditions are impacting various sectors, with the housing sector being particularly affected by the decline in transaction values.