Drop In Villas’ Sales Due To High Prices
Experts in the real estate market in the eastern region confirmed that the real estate market is witnessing a remarkable and clear reluctance by customers to buy villas; and that is because of the continuous rise in prices. Some investors said that the revenues of building villas are 200 to 300 thousand Riyals, and from 50 to 100 thousand Riyals for each freehold apartment. They added that the prices of the villas and the duplexes became extremely high making it very difficult for the people to try to buy villas. A villa's area is 400 square meters, and its price can reach two to three million Riyals and that depends on its place and area, they also mentioned that the villas and duplexes' market witnessed a noticeable sales decline by 20% compared to the last period.
Are Apartments The Solution?
"Demand and supply" controls every real-estate market worldwide and this is also the case in the Saudi market. In both the land sector and varied housing unites like villa, duplexes and freehold apartment. Most people in the eastern region "Al-Sharqiyah" prefer Al-Khobar to the other cities and provinces when buying and consequently, the prices of lands increased to 10-30% because of its geographical location, its modern infrastructure, and the needed facilities and services available in it.
There is a huge disparity in the prices of the housing units, many Saudis find it cheaper to buy apartments than villas for many reasons, first and foremost: the lack of money and the lack of companies specializing in financing those of low-income.
The eastern province still needs more than 20 to 30 thousand housing units a year, and this number is increasing as a result of the significant shortage of the development companies and the lack of creating and introducing new systems that contribute to encourage companies specializing in finance and development.
Villas' prices in khobar are about 30% higher than their prices in Al-Dammam, knowing that the real estate market is mature now so the traditional thinking is not acceptable. Moreover the market doesn’t meet the needs and desires of most of the buyers; that's why the development companies should innovate products that suit the current stage of the real estate market. The sufficient funding is also very necessary since the current period is considered a great opportunity for funding.
Development companies always demand and ask to focus on houses and the economical units that don't cost much but at the same time meet the demands and needs of the society, especially those of low-income. The freehold apartments and the economical houses are more suitable for the Saudi citizen because of their reasonable prices and because they are available in different areas and prices. Let's not forget that there are people who always look for villas of large areas and excellent finishing, so their needs should be met properly as well.