A Kuwaiti firm has said it expects growth in the GDP of Saudi Arabia in 2022, on the basis of increasing oil prices and higher production.
A report titled KSA Real Estate Outlook H1 2021 by Kuwait Financial Center aka Markaz has made the claim.
The report predicted positive indications of stability and recovery in the Saudi real-estate sector, and said it expects real-estate prices to stabilize after a long period of decline since 2015.
Government spending on infrastructure projects as part of the Saudi Vision 2030 program is expected to boost non-oil GDP growth.
Meanwhile, the fiscal balance, which was severely dented due to Covid-19, is expected to improve in 2021 and beyond.
Markaz’s report indicated that investments are expected to pick up as the Government initiates major projects like Neom City, and follows through with the Saudization policy.
Steady population growth, government subsidies, and the enacted mortgage law are enabling banks to finance home purchases fueling the growth in the residential sector.
Managing Director of MENA Real Estate at Markaz, Bassam N AI Othman said: “The Markaz analysis is based on its proprietary Real Estate Index, which helps investors assess the real estate market. The Real Estate Index is derived from various economic indices, such as oil and non-oil GDP, inflation rates, increase in employment opportunities, and others.”
He added: “We also analyzed data related to the Saudi real estate market covering the past seven years from which we extrapolated our expectation for the sector.”
The report also indicated that the Saudization program might lead to an increase in employment opportunities, which is yet another positive indicator for the real-estate sector.
Moreover, resuming work from office spaces and an increase in tourism is expected to improve the overall demand for the office, commercial, and hospitality sectors.