Rise in real estate prices in Riyadh 'unjustified but normal’; works underway to address supply issue: Al Hogail

Majedd Al Hogail, Minister of Municipal, Rural Affairs and Housing

Majedd Al Hogail, Minister of Municipal, Rural Affairs and Housing, said that the rise in real estate prices in Riyadh - and not the region as a whole - is unjustified and dissatisfactory, but is normal.

He indicated that there is always exploitation of the gap between supply and demand, and that the role of the ministry is to move faster towards addressing such a problem.

In an interview with the "Socrates Podcast" program, Al Hogail said that there was no problem in Riyadh from 2019 until mid-2020, but the problem began to appear in the second half of 2020 and during 2021.

Riyadh represents 45% of real estate transactions in the Kingdom and is attractive to investment, as it is the first area to be subject to correction such as the building code.

The revision of the code led to the delay in the issuance of some permits.

The ministry is working on the correction through Al-Jawan area, which will offer many housing units at competitive prices, in addition to other projects, which will address the problem of supply.

Al-Hogail also stressed that there is strong interest and support from Crown Prince Mohammed bin Salman, and that there should be a quick correction to this problem.

The ministry will offer more land plots and housing units to ease the gap between supply and demand, in addition to imposing fees, said the minister, indicating that the price stability and offering housing units during the recent period is partly due to idle land fees.

He pointed out that there is good stability between supply and demand across the Kingdom, with a diversity in housing units, where the average price ranged between SAR 250,000 to SAR 1.2 million.