Residential real estate prices in Saudi Arabia fell by 7.4% in 2016, according to newly released Real Estate Price Index from the country’s General Authority for Statistics.
The numbers suggest increasing pressure on Saudis’ property buying power as government cuts caused by the low oil price begin to hit home. With many financial allowances, particularly for public sector workers, having been slashed, knock-on effects are now being felt across Saudi real estate.
On a quarter-by-quarter basis, residential prices fell by 3.4% between the third and fourth quarters of 2016.
It isn’t just the lack of buying power in the Kingdom that has pushed prices down. With a plan to introduce tax on undeveloped urban land looming, more building has been taking place, increasing the supply of real estate.
Analysts say that, for the average Saudi citizen, the price drops are largely a good thing, given that the Kingdom has been struggling with a housing shortage for some time.
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