Saudi Gazette report MAKKAH — Several realtors are of the view that real estate prices have reached a saturation point and are expected to decline 30 percent in the coming two years, Alsharq newspaper reported. The chairman of Makune for Real Estate Development, Majdi Hariri, said returns from rents have declined from 7 percent to between 3.5 and 5.3 percent. “The price of a square meter of land at least 10 kilometers away from the Grand Mosque ranges from SR3,000 to SR5,000. A 140 square meter apartment in such locations is sold for SR600,000, which is a very high price. A reasonable price for such an apartment would be SR400,000 but these properties are usually in far away locations that lack basic utility services such as electricity and water,” he said. According to Hariri, real estate investors have not made significant returns on their investments, and as such, have decided to halt any investment for the time being. Thamer Al-Dhebaiban, a real estate expert, said prices had been on the rise since 2008 until the end of 2012 and are now experiencing a recession. “Prices have reached a saturation point because of the compensation paid by the government for removing houses in favor of projects. The real estate market has begun its hibernation period and prices are expected to stay low for at least four years,” he said adding that as soon as government projects are completed, prices will be at a level affordable to most people.
