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Lower oil revenues should have limited short term impact
JLL, the world's leading real estate investment and advisory firm, today has released its fourth quarter (Q4 2014) Riyadh Real Estate Overview report that asses the latest trends in the office, residential, retail and hotel sectors in Saudi Arabia's largest city.
Commenting on the Riyadh market report, Mr Jamil Ghaznawi, National Director and Country Head of JLL's KSA, said: "In the last quarter of 2014, we have witnessed the introduction of new mortgage regulations requiring a 30% down payment on all home financings, this has restricted growth levels in the residential market. While in the office sector, new supply has constrained performance and increased vacancies. Confidence in the retail market remains strong as reflected in the announcement of various new shopping centers, positively effecting rental growth figures. Supply increases in the hotel sector, this showed that occupancy rates were improving and average daily rates remain under downward pressure."
Mr Ghaznawi added: "The Saudi real estate market is heavily dependent upon high levels of government spending and while the more prudent approach is unlikely to have an immediate impact on the market in 2015, it certainly marks the end of a period of rapid increase in spending, which could constrain the growth of the real estate market in the longer term."
Sector summary highlights
Riyadh prime rental clock
This diagram illustrates where JLL estimate each prime market is within its individual rental cycle as at the end of the relevant quarter.
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