CAIRO: Saudi Arabia’s real estate prices increased 0.7 percent in the second quarter of 2022 compared to the corresponding period last year due to an increase in the residential sector prices, revealed the General Authority for Statistics on Sunday.

The Kingdom’s annual residential real estate prices rose by 1.9 percent in the second quarter of this year, reported GASTAT.

This increase was fueled by a 2 percent increase in residential land prices, which weighed heavily on the general price index.

Residential land has a price index weightage of 62.2, indicating a relatively significant impact on the general price index.

The weightage of commercial land on the Real Estate Price Index recorded 30.9, whereas the agricultural land clocked at 3.6.

“The spectacular house price growth in the Kingdom mirrors what we are seeing around the world,” said Faisal Durrani, partner and head of Middle East Research at Knight Frank.

“However, in Saudi Arabia, the government’s programs to boost home ownership have turbo-charged demand, development activity and house prices,” Durrani continued.

The price indices of Saudi apartments, villas and houses fell by 1.1, 1.1 and 0.9 percent, respectively. Still, the general price index of buildings did not record a significant change this quarter compared to the same quarter in 2021.

Commercial properties, on the other hand, saw a 1.5 percent decrease in the annual price index in the second quarter of 2022, reported the authority.

The drop resulted from a decrease in the prices of commercial land plots by 1.5 percent and galleries by 1.1 percent, conveyed the compiled data.

On a year-on-year basis, price index levels of the commercial centers slightly rose by 0.1 percent, whereas its agricultural real estate prices fell by 0.6 percent due to the 0.6 percent drop in land prices.

Compared to the previous quarter, the country’s general REPI went up by 0.3 percent in the second quarter, driven by a 0.5 increase in residential real estate prices.

Price indices for apartments and villas rose by 3.1 and 1.2 percent, respectively, while the house price index fell by only 0.1 percent compared to the first quarter of this year, stated the report.

Furthermore, quarterly commercial land plot and gallery prices dropped 0.2 and 1.4 percent, leading to a fall in the commercial real estate price index by 0.2 percent in the second quarter.

The agricultural land price index saw a slight 0.1 percent drop this quarter.