Saudi real estate yields 8 percent yearly since 2007, Dubai-based Cityscape Intelligence (CI) - the leading global emerging country real estate information service, said on Wednesday. In its newly launched new market data launched, CI did not only compare real estate sales and leasing prices in eighteen areas across Jeddah and Riyadh, but also compares office and residential asset classes, tracking prices back to 2007. Moira Robertson, project director of Cityscape Intelligence, said “no real estate price index like this existed in Saudi Arabia until we commissioned our own research. It was therefore surprising to find that the market has yielded on average 8 percent per annum clearly avoiding the boom bust that some other Gulf markets have suffered.” “With Saudi Arabia's more liberal attitude towards inward investment, robust liquidity, low construction costs, an undersupply in the Saudi market, especially for low cost housing and more transparent regulation regarding mortgages, industry professionals can now access comparable real estate pricing intelligence with a quarterly update,” Robertson added. The new price index includes real estate sales and leasing prices in fifteen areas of Riyadh and three areas in Jeddah. Information on each area is then sub-divided into residential and or office real estate. CI noted that the rental prices for apartments in Riyadh and Jeddah can vary immensely. For example rental prices of three bedroom apartments in Jeddah are on average SR24,000 per unit, while the same in Riyadh is SR52,000 per unit, a difference of 116 percent. Sales of the same types of 3 bedroom properties in Jeddah are SAR292,500 on average but in Riyadh it will cost closer to SR1.6 million, a massive difference of SR1,307,500 or 447 percent. “Choosing the right location could save potential investors thousands of dollars. For example in the case of residential property, separately we provide low, high and average pricing by district for villas and studio, one, two and three bedroom apartments. “We also supply information on prices for commercial property on a cost per square meter basis as well as average yields for rental property. This is vital information for investors and developers and when combined with actual build costs can quickly establish initially whether projects are financially viable or not. Previously it might have taken months to reach that point in the due diligence cycle,” Robertson further said.
