Saudi plan to stoke real estate boosted as price drop slows

RIYADH: Saudi Arabian house prices may be bottoming out as Crown Prince Mohammed Bin Salman targets real estate as part of his plan to revitalise the economy. A drop in prices slowed last year in major cities across the kingdom after a “rapid decline” in 2016, Knight Frank said in a report last Monday. The broker said it’s optimistic about the market’s long-term outlook as the government implements reforms to boost real estate and the economy starts to recover. We started seeing signs that the market has bottomed out and may be close to stabilising following two years of decline,” Raya Majdalani, research manager at Knight Frank, wrote in the report. Driving housing development is central to the government’s plans to put the Saudi economy on a firmer footing, and real estate is forecast to double its contribution to economic output by 2030, Knight Frank said. A housing shortage, a trend toward smaller households and population growth are also expected to stoke demand in the housing sector, according to the report. Saudi Arabia enacted a controversial tax on empty land in urban areas and started programmes to streamline approvals and fund new developments. An economic stimulus package for 2018 saw the lion’s share – 21 billion riyals (¤4.5bn) out of a total of 72 bn riyals (¤15.5bn)- dedicated to housing.