Saudi-Pakistan Investment Forum discusses boosting trade and investment partnerships    Crown Prince concludes MEGISummit: We will work seriously to achieve our goals    EXIM Bank signs MoU with Japanese Sumitomo Mitsui Banking Corporation    Saudi Pavilion at EXPO 2020 marks 76th anniversary of UN establishment    Greece premier praises importance of Middle East Green Initiative Summit    Saudi Arabia calls for restraint, de-escalation in Sudan    Riyadh Season hosts Barcelona and Boca Juniors on Maradona Cup night    Monshaat partners with MITEF Saudi & Arab Startup Competition    HSBC CEO — 2021 set to be first trillion-dollar year for green bonds    Riyadh dominates GCC rankings in human capital    All eyes on Jeddah! World's best golfers set for climax of Aramco Team Series    Crown Prince launches series of regional initiatives for climate action at MEGI Summit Ushering in a new green era for Mideast region    WFP's Beasley lauds Saudi Arabia's role in providing aid to millions around the globe    RedSeaIFF announces best short films by emerging Saudi filmmakers 15 shorts make up New Saudi/New Cinema slate    Pakistan hammer India by 10 wickets to clinch T20 win    Michael Jordan's trainers sell for record $1.47m at auction    China postpones Beijing marathon due to Covid surge    US actor James Michael Tyler dies aged 59    Bride's fingerprint not required in revised e-marriage contract    'Easy On Me': Adele returns to UK number one    'Be a Star' — WWE stars fight cyberbullying in Riyadh    Bollywood superstar's son denied bail in drugs case    Saudis, expats mourn death of prominent Filipino preacher in Riyadh    Bollywood actor Sidharth Shukla dies at 40    Custodian of the Two Holy Mosques Directs KSrelief to Urgently Provide Malaysia with Medical, Preventive Equipment and Supplies to Address COVID-19 Pandemic    Custodian of the Two Holy Mosques Congratulates President of Maldives on Independence Day    Weather Forecast for Sunday    RSNF Commander Patronizes Ceremonial Launching of His Majesty's Ship "Jazan"    OIC Condemns Houthi Attempts to Target Civilians in Saudi Arabia    Philippines evacuates thousands as monsoon rains flood cities, provinces    Heavy rain in India triggers floods, landslides; at least 125 dead    U.S. Records 64,321 New Infections of Coronavirus    Without Fans, Tokyo Olympics Kicked Off    Pilgrims Perform Dhuhr and Asr Prayers at Arafat Holy Site    Dr. Mohammed Sulaiman Al-Jasser, Saudi Arabia's Pick to Chair IsDB Group for the next five years, unanimously approved by BoG Committee of Procedures    Saudi Press: Fitch affirms Saudi Credit Rating at "A" with a revised outlook to stable from negative    Handled Cargo at Saudi Ports Increases during June 2021    SDAIA, DARP & STC Launch Pilgrim's Smart Bracelet (NUSK)    2 Goals by Diaz Gives Colombia 3rd Place at Copa America    Saudi Cinema Night at Arab World Institute in Paris Kicks Off    KSU Leads Joint International Scientific Project for Early Detection of Breast Cancer    Saudi Arabia to Participate in Cannes Film Festival 2021    Arab Cup U-17 Championship Draw Saudi Arabia, Morocco, Palestine, Kuwait, in the 1st Group    AWI Hosts Saudi Cinema Nights in Paris    Brazil Beats Chile at Copa America Despite 2nd-Half Red Card    Council of Senior Scholars: Muslim Brothers' Group Don't Represent Method of Islam, rather only Follows its Partisan Objectives, Violating our Graceful Religion    Eid Al-Adha Prayer Performed at the Grand Holy Mosque    Pilgrims Perform Dhuhr and Asr Prayers in Arafat Holy Site    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Jeddah real estate tilted towards upper-mid to high-end segments
Published in The Saudi Gazette on 25 - 12 - 2011

The buoyancy in the economy coupled with a growing population has increased consumer confidence in Jeddah's residential property market, Colliers International said in its fourth quarter of 2011 Jeddah residential report.
However, the majority of the growth is concentrated in the upper-mid to high-end segments of the market which has contributed to the high sales prices that are being achieved in a number of recent projects, the report said.
The new residential supply is mostly concentrated in east Jeddah along the Al-Haramain Expressway within districts such as Manar, Al Marwa and Al Safa. Most of the new supply is in the form of multi-family dwellings rather than single-family dwellings. This shift from single-family dwellings can be attributed to sharp increases (20 percent-30 percent) in land prices experienced over the past year and the impact this will have on the affordability of the product.
The way in which Jeddah developed over the years, the infrastructure in the older parts of the city, such as the Corniche, Al Balad etc. is no longer up to current standards of development.
For this reason, namely the improved and better infrastructure, most of the city's upper-mid and high-end housing supply can be found in north Jeddah. The residential sector in Jeddah has nevertheless been a challenge to the Jeddah Municipality and the Jeddah Development and Urban Regeneration Company (JDURC).
Approximately one-third of the city's population is currently housed in informal settlements and the municipality wishes to re-house these people in decent but affordable accommodation.
The aim is to create additional housing through the regeneration of central districts of Jeddah such as Al Ruwais, Al Balad and Qasr Khozam. This will revive and modernize these areas whilst preserving a wealth of historical buildings and structures. As the regeneration programs proceed, residents of informal settlements are to be re-housed in these mixed use neighborhoods.
Colliers research indicates that the average sales price for multi-family dwellings located predominantly toward the east along the Al-Haramain expressway, range between SR2,650/m2 and SR3,200/m2. Prices in newer projects will be measurably higher than those in earlier projects mainly because of the increase in land cost.
In recently completed projects the cost of the land has comprised as much as 50-60 percent of the overall development cost. Moreover, the newer supply of low to mid-end apartments was developed mostly by smallsized developers in districts with limited infrastructure development.
High-end apartments in the city centre sell at prices of approximately SR3,900/m2. Apartments in high-rise water-front developments are becoming more popular with highincome households. There are a number of towers currently under construction which include Lamar, Masarat, Diyar Al Bahr and Al Mada Towers.
The average sales prices for these ultra deluxe apartments range from SR12,000/m2 up to SR22,000/m2.
Central Jeddah has a very limited supply of single family dwellings such as villas and duplexes. There are a few developments of this nature in areas such as Al Marjan and Basateen in north Jeddah but the highest concentration will be found around Obhur Creek. Selling prices for villas range from SR2,800/m2 to SR4,500/m2 depending on location and quality proposition. A recent, new supply of villas close to the Corniche has been achieving average selling prices of SR5,450/m2 and which appear to be the highest villa prices in Jeddah.
Until now buyers have shown a definite preference for residential developments in and around the city center over developments further away from the city. There is however expected to be a shift in sentiment with the completion of new residential communities targeted specifically at Jeddah's mid-income households, such as Al Fareeda by Ewaan and Mashraf by Kinan.
Given the preference displayed by investors for properties located in and around the city center as opposed to developments situated in the periphery of the city, it is felt that there are currently unexploited development opportunities in partnership with bodies such as the JDURC or the Ministry of Housing.
There are a number of land parcels in areas such as Wadi Al Asla, Al Ruwais, Al Balad, the Old Airport and Qasr Khozam located in close proximity to the city center which would be suitable for the development of moderately priced residential units.
Alternatively, community-led housing developments similar to the Al Fareeda Community in Dhahban and the Masharef Community in Asfan are attractive options for developments located closer to the outskirts of the city. It is important, though, that social infrastructure elements such as schools, healthcare, recreational facilities and convenience retail be included in or close to such developments to enhance the attractiveness of the development to investors.
The absence of these elements from such developments will detract from the appeal that such developments would otherwise have to prospective investors.
Currently, Jeddah's residential stock is estimated at more than 730,000 residential units. Most of the new stock in the market is targeted at mid- to high-income households at prices well beyond the financial reach of the majority of Jeddah's households.
This underscores the urgent need for appropriate mortgage schemes that will enable prospective buyers to build or buy homes. Present market conditions such as high land prices, rising construction costs, and delays in implementing the mortgage law seriously curb the delivery of a number of developments meant to cater to the housing needs of low to mid-income households.
As the city's urban boundaries expand beyond Obhur Creek, land and unit prices closer to the city centre are expected to continue to increase.
This further emphasizes the importance of upcoming projects such as Kingdom City and other residential developments envisioned in Rabigh, Thuwal and Dhahban. The rail track connecting Madina with Makkah through Jeddah will shorten the travel time between central and north Jeddah. This connectivity will enhance demand in northern Jeddah which will in turn drive supply in the near future. However, current price levels of existing residential offerings in northern Jeddah districts including Bandar and Al Shata'a Al Dhahabi are deemed inappropriate by many of Jeddah's homebuyers because of the lack of social infrastructure in the form of healthcare, educational and recreational facilities in these areas.


Clic here to read the story from its source.