Need for regulation in Saudi Arabia’s property market
A Saudi Arabian economist has described the need for a national property market regulator after vast variations in the country&rsquo;s real estate index throughout the year; recently the index reading decreased by SAR 31bn ($8.26bn) within three months. The majority of the decline appears to be caused by a normal drop of property market activity during the summer, although a new legal requirement to pay 30% of a property&rsquo;s financing value as a first instalment is expected to have been a contributing factor.
Riyadh-Mubasher: Saudi Arabia should establish an official entity supervising and regulating the local real estate market, as is the case with the stock and forex markets, economist Khalid Al-Rubaish told Mubasher.

The Kingdom’s real estate index reached SAR 16.6 billion in Shawwal, its lowest level in 1436. However, it peaked to its highest level in Rajab, recording SAR 47.6 billion.

Al-Rubaish said this decline was mainly due to the fact that property trading usually slows down in the summer, adding that the condition of paying 30% of the financing value as first installment contributed more to the decline.

“The reason behind decline in retail mortgage financing to 70% is the implementation of the new real estate financing system,” the expert said.

Translated by Abdul Maguid Aboshahla