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KSA looks to rapid diversification in 2016

KSA looks to rapid diversification in 2016

April 2016

A challenging macroeconomic environment, low oil prices and a stronger U.S. dollar will continue to impact the KSA market, but the government is taking serious steps to adjust and diversify, according to JLL’s Top Trends for KSA Real Estate.

“Such an environment is also an opportunity for the government to make structural changes and embark upon a rapid diversification drive which would ultimately have a positive long-term impact on real estate and the wider economy,” says Jamil Ghaznawi, National Director and Country Head of JLL KSA.

“We have already seen signs of economic reforms such as the opening up of the Tadawul to QFIs, 100% FDI in retail/wholesale sectors, expansion of religious tourism, and so on. Additionally, the 2016 Saudi budget will have implications for the real estate market, and there will be particular opportunities for certain market segments such as affordable housing,”​ he adds.

JLL outlines seven key trends that will impact the KSA real estate market this year which include White Land Tax, a new tax law which will reduce pressure for further increase in land values, and ultimately increase real estate development activity.

Other trends include; reform of home financing, reduced spending on transport infrastructure, project delays reduce risk of oversupply, more action on affordable housing, challenging hotel landscape and less capital outflow.

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