Rents In Riyadh Are Expected To Decrease Further As Property Prices Fall

Many have already seen rental prices fall around the country this year, but there is more to come as per a new report.

According to the Arabian Business, consultants JLL has said that a further decline in rents can be expected in Riyadh.

They have mentioned some of the main causes for this in their report amongst which includes the levy on dependents of expat workers.

“This resulted in some expatriates repatriating family members and relocating to smaller units and bachelor studios. Resulting in a general shift in the market from larger, family units (3 bedrooms), to smaller units. Demand will likely continue to weaken as the levy progressively increases over the next three years,” mentions the report.

JLL adds “The tax levy on expatriates could be restricting demand for rentals, as expatriates repatriate family members to avoid the levy.”

Despite rental prices falling new units are continuing to spring up in Riyadh, which is another cause for the decrease of rent and property prices in the city. According to the report, 2018 and 2019 are expected to see a supply of 20,000 and 19,000 new units respectively bringing the total residential stock of Riyadh to 1.2 million units.

Prices for apartments in the capital declined by 4% over the year. For villas, the decrease in prices stood at 5%.

The report also makes mention of the Jeddah property market. It notes that sale prices and rents have decreased in Jeddah in 2017, however, the rate of decline shows signs of stabilization.

You can read the full report by JLL here.