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FINANCIAL NEWS
Saudi Arabia- House prices soar on land costs, housing shortage
17 Aug 2010
(MENAFN) A report revealed that a shortage of housing and rising land costs are causing house prices in Saudi Arabia’s two largest cities to rise while an increase in new office space will push rental rates lower in Riyadh, Reuters reported.
The reports said that the pressure of population growth, increases in construction costs and the shortfall in development are likely to force house prices slightly higher in Riyadh in the short term. House prices in Saudi Arabia’s second largest city, Jeddah, have also risen in the past 12 months as the city of 3.5 million faces a shortage of around 300,000 homes, the report added.
While most of the demand for housing in the kingdom comes from low income individuals, the absence of a mortgage law and lack of financing is preventing developers from building for that segment of the population.
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