Residential transactions have declined by 5 per cent
Saudi Arabias residential market has shifted from sales to rentals, says US-based property consultancy JLL.
We have witnessed a shifting demand in the residential market in both Riyadh and Jeddah, as the trend moves towards property rentals from sales, says Jamil Ghaznawi, national director and country head of JLL Saudi Arabia.
Residential transactions declined by 5 per cent in the year to November 2015 compared with the same period a year earlier. We expect rental demand to continue in 2016, but at a slower rate in comparison with 2015, while little or no change is likely in the sales market in 2016. However, this situation may change once the regulations surrounding the white land tax are released.
Riyadh said last year that it will impose an annual 2.5 per cent fee on undeveloped urban land designated for residential or commercial use.
The tax will be imposed as a percentage of the lands value. The money will be collected in an account at the central bank and used to fund housing projects and other public services.