Millennials set to reshape Riyadh's residential market: JLL

Riyadh’s residential real estate market is likely to witness a positive change with the growth of millennials entering the workforce who are increasingly demanding affordable housing, JLL said in a recent report.

The evolving social demographic make-up of the Kingdom is rapidly shaping the country’s real estate landscape with a growing young population having a significant impact on residential urban development, it added.

“We are witnessing a push-pull effect on the residential market in Riyadh - the government stimulating the market through home ownership incentives and demand being further stimulated by an increasingly young workforce seeking suitable and more affordable residential options in the capital,” said Dana Salbak, Associate, JLL MENA.

Developers are now moving away from family-focused traditional villas and spacious apartments to mixed unit sizes and layouts catering to the younger millennial population.

“With millennials entering the job market the demand for affordable housing will naturally increase. Developers are responding to the changing dynamics of society by introducing new schemes aimed at facilitating ownership in the near future,” she added. 

Meanwhile, Riyadh’s residential market is expected to continue softening over the next 12 months, albeit at a slower rate as new supply enters the market.

An additional 30,000 residential units a year are expected to be handed over in 2019 and 2020, JLL said, adding  29,000 residential units were delivered last year.

"All sectors of Riyadh real estate market continue to remain in the late downturn stage of their cycle, however, the residential market appears closer to the bottom where further rental declines may be experienced in the next 12 months," it noted.