Alpha1Estates: Makkah-Madinah Real Estate Index falls 21.5% in 2022 as global economy bites

Alpha1Estates: Makkah-Madinah Real Estate Index falls 21.5% in 2022 as global economy bites

Global real estate advisory firm Alpha1Estates said on January 9 that its real estate index for Makkah and Madinah had fallen by 21.5% in 2022, compared to a jump of 12.9% in 2021, impacted by downturns in the global economy, central bank interest rate hikes affecting indebtedness and a continuing recovery in pre-pandemic levels of overseas pilgrims to the Holy Cities.

Saudi Arabia’s Tadawul All Share Index (TASI) fell 7% in 2022, reprseenting the first drop on the TASI in 7 years when it dropped 17% in 2015, with the index primarily hit by the state of uncertainty about recessions in the global economy. The TASI’s real estate sector index, Real Estate Management & Development with 12 constituents, in 2022 fell 21%, three times as much as the fall of the TASI, similar to the Ihsan al-Haramain Index at 21.5%, with Makkah real estate at 22.9% and Madinah real estate at 19.1%, as it was further hit than the TASI by interest-rate hike repercussions affecting the indebtedness of many listed real estate companies, oil price fluctations affecting the real economy and the reliability of the Holy Cities on pilgrims which has not fully recovered to 2019-levels.

‘The real estate sector in the