Infrastructure services influence residential land prices in Riyadh
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The number of transactions and enquiries is expected to continue rising in 2012 with the supply/demand gap narrowing.
This review focuses on the three most dominant residential markets in the Eastern Province of Saudi Arabia, namely Dammam, Dhahran and Al Khobar.
The buoyancy in the economy coupled with a growing population has increased consumer confidence in Jeddah’s residential property market.
A study by the Supreme Commission for the development of the Saudi capital Riyadh has revealed that seven urban development and infrastructure elements are among the most important factors affecting the prices of residential land in the Saudi capital, Riy
The Commission said the availability of services such as electricity, water and sanitation, and asphalt roads, sidewalks, street lighting, and landscaping has a direct impact on the price per square metre for residential land.
The average price per square metre for residential lands that has all the basic infrastructure elements is SR1199 ($319.7), while the average price per square metre of land that has electricity, water, lit paved roads is around SR900 ($240), the study showed.
The price of residential land with only electricity and paved roads was the lowest at SR589 ($157) per square metre, it said.
Furthermore, the average price per square meter for residential land with available sanitation services is 15 per cent higher than those without the service at SR179 ($47.7), while the availability of lighting adds a 9 per cent increase to the average price of land at SR104 ($27.7) per square metre, according to the report.
The Saudi land market had been very active between 2001 and 2007, luring regional real estate developers to enter the Kingdom's market, in light of the need for an estimated 200,000 housing units annually, driven by strong local demand.
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