Tuesday , August 16 2022

35% decline in property deals in Saudi Arabia



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The slowdown in the value of transactions in retail space is the strongest engine in the sector

Saudi Arabia's commercial real estate sector dropped by a record 34.7% in one week, is still hit by a 5% tax on commercial transactions that rearranged the real estate sector. The decline in the value of business transactions to a new level after fluctuations in the level of ups and downs as a result of the impact of the market on a number of different factors in a new response to the downturn in the market that encompasses both commercial and residential without differentiation. degree fixed.

The reasons for the decline in the total value of transactions in the commercial sector were in particular the application of the tax, the impact of land charges and the pressure on the value of real estate investments as a whole, as well as the fear of investors risking to buy at that time under pressure on the big market that remains the most volatile period last in proportion The decline especially in fees and taxes since its adoption by the Council of Ministers and the concern about the future of real estate, which is the main concern for the interested from her.

Mohamed Al-Olayan, owner of Olayan Real Estate Investments, said the real estate market is highly interdependent between its branches, regardless of its operations. Therefore, each branch has a direct influence on the other. Households that suffer from successive dips and owners of commercial and residential properties are considered to be the same persons and persons, which means that the impact is directly on sales and purchases in one way or another, explaining that this indicates where the real estate market after the resistance of the commercial sector, the last affected branches are what happens in the local property.

Al-Olayan added that it is separate from the rise and strength of the Saudi economy and the decline in the value of real estate transactions, with sources of inflation being high commercial property prices, which are very high compared to the services provided or even for the location and characteristics that it contains, Value Correction will cast a direct shadow on the local economy, as the decline in the value of commercial properties will reduce the cost of real estate projects, and hence the fall in the price they, indicating that the ownership of Saudi Arabia in a corrective move and this will positively affect the local economy.

The week-on-quarter decline in the value of weekly deals included the housing and commerce sector, with a decline of 11.4% for the second consecutive week, down 6.4% in the previous week, with the total value of trades in the commercial sector dropping by a record 34.7% . Compared to a record 87.5% in the previous week, the total value of trades in the commercial sector reached $ 228 million at the end of last week.

Khalid Al-Baz, managing director of the construction contractor Mahaworun, said there was a significant drop in response to the pressure exerted by the local real estate sector, especially the effect of the tax that witnessed a growing contraction in the efficiency of the commercial sector has difficulty returning to its normal levels. The market is witnessing a significant drop in prices in line with demand at reasonable and attractive levels, especially given that the market has already begun to pay bills that are expected to witness a big push on the market and prices with proven large quantities of land cleared during the last period.

Baz added that real estate investors will re-priced the prices of what they own or offer real estate, especially with demand reduction, by paying the government with all its might to restore prices to normal, the primary goal of eliminating inflation real estate prices in all sectors, which shows that there is a compact control over the whole activity of the property, which creates a fertile soil for a fall in value, especially considering that real estate prices have fallen to more ie 20% for a short period, confirming the strength of government decisions about the reality of the market and the entry of the program in real time. ,

The total value of weekly deals for the local property market declined by 18.5%, compared with a 10.6% growth in the previous week, and the total value of weekly real estate deals was below 930 million dollars.

Walid Al-Ruwash, Managing Director of Future Real Estate Development, said there were consistent falls in transaction value, but what characterizes this decline is that there is a significant drop in value, although it is not equivalent to a drop in demand , which suggests that in the future a fall in value after a wave of Petitions at Heights has been weakened in recent years, pointing out that what is happening now is just a correction in the real estate situation that began with the clarity of control.

He said that as economists they want to reduce the value of the property so that they can move and earn from the market, provided that the loss of what they own or offer and the outflow of capital is good to a large extent , preferring this scenario to survive the rigid situation, which testifies to the buyers' reluctance and immutability of sellers, Emphasizing that correcting movement and value together is no longer an option but a reality.

With respect to other property indicators, the number of real estate transactions increased by 8.3%, compared with a weekly 6.5% increase, to settle in 6934 real estate deals during the week. The number of properties sold increased by 7.2%, compared with the previous weekly increase of 8.7%, to establish that 7207 properties were sold during the week.

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