Villas and apartment prices in Jeddah drop 7% in Q4 2018: JLL

Sale prices of villas and apartments in Jeddah fell 7 percent year-on-year (YoY) in Q4 2018, according to JLL’s Jeddah Real Estate Market Overview.

Average rents of residential units dropped 13 percent YoY and 12 percent YoY for villas.

The weak performance was attributed to economic slowdown and subdued demand for apartments in Jeddah, on the back of expat departures.

Vacant apartments are likely to increase as more projects are being finalized, which will weigh on rents and sale prices. Accordingly, owners might cut prices, JLL said.

The total supply of Jeddah’s residential units and villas stood at 817,000 units last year. A further 7,000 and 16,000 units are expected in 2019 and 2020, respectively.

*Estimates.

Average office rents dropped 19 percent YoY in Q4 2018 to SAR 947 per square meter, compared to SAR 1,164 per sqm a year earlier.

The high-quality office stock reached 1.1 million sqm by the end of 2018. A further 106,000 sqm of office spaces is projected to be delivered over the next 12 months, JLL added.

 *Estimates.

Jeddah’s retail spaces stood at 1.4 million sqm by the end of 2018. The market is expected to see an increase in supply with 108,000 sqm of retail gross leasable area (GLA) in 2019 and 280,000 sqm of GLA next year.

Shopping mall operators are likely to benefit from new opportunities, as cinemas, food and beverage shops are forecast to play a vital role in the potential supply mix.

 *Estimates.

In the hotel market, Jeddah had 11,500 rooms last year. The sector is expected to add 2,700 and 1,100 new rooms in 2019 and 2020, respectively.

Average daily rates jumped 11 percent to YoY to $293 from January to November 2018, while occupancy rates dropped to 59 percent.

 *Estimates.