Demand in Saudi Arabia’s housing market to move towards rentals as incomes tighten due to VAT hike – The National

Demand in Saudi Arabia’s housing market to move towards rentals as incomes tighten due to VAT hike – The National

Thousands of new units to be delivered across Saudi Arabia in the second half, JLL report says





























King Abdullah financial district in  Riyadh. Thousands of new units are expected to be delivered in the second half of this year across Saudi Arabia, according to JLL report.  AFP











The residential sector in Saudi Arabia is expected to see increased demand for rental units in the short to mid-term as households in the kingdom face higher costs due to the rise in value added tax, according to JLL.



In May, Saudi Arabia tripled VAT from 5 per cent to 15 per cent to shore up the country's finances that have been hit by low oil prices and the coronavirus pandemic. The move affected a wide range of sectors in the kingdom including real estate.



"A reprioritisation of household spending will continue, and we expect to see a shift towards the rental market as it becomes comparatively more attractive and cost competitive," Dana Salbak, head of Research for JLL MENA, said. "This could see performance trends reverse, whereby sale prices begin to slowdown and rental rates