Saudi real estate outlook: VAT, COVID-19 add to challenges

Saudi real estate outlook: VAT, COVID-19 add to challenges

"This weaker economic backdrop, combined with the hike in VAT“¦ will also mean challenging conditions for Saudi Arabia's real estate market as both corporates and consumers s ale back discretionary spending plans,“ said Taimur Khan, associated partner at Knight Frank Middle East."Overall, the depth of the contraction and rate of recovery will be dependent on the rate at which the global economy and global mobility returns to some form of normality. These factors will underpin demand and activity in the hydrocarbon, travel and tourism and wholesale and retail trade sectors, all of which form significant parts of Saudi Arabia's economy,“ he added.Impact on the residential marketAcross Saudi Arabia, transaction volumes in the year to the second quarter of 2020 dropped by 13 percent compared to the same period last year,