(MENAFN - Arab News) Prices of property, including lands and housing units, are predicted to drop by 25 percent in 2014, local media said quoting property experts.
The experts attributed the expected drop in property prices to a number of factors, including growth of stock market which will attract huge liquidity from the real estate sector, and completion of housing projects earlier announced by the Ministry of Housing in different parts of the Kingdom.
The latter reason will play a key role in solving considerable portion of the housing woe, they said.
Economic expert Fadl Abo-Ainain said the price fall of property is governed by two things; the ability of real estate decision-makers to keep the property market cohesive and avoid rush to have their money reinvested in other investments such as stock market and, secondly, to keep the present status of market in terms of recession and gradual slowdown.
According to the economic expert, the pricing fall will mainly be concentrated in metropolitan cities while smaller cities and towns will witness gradual fall in their properties.
For his part, head of Sabhan Property Development and Investments Group Naif Al-Sabhan said the new year will be a testing year for the real estate market, either to grow, decline or remain recessed.
He recalled same reasons which were behind the price fall but added that a number of real state development firms will finalize their projects soon, a matter that will make supply surmount demand on property units and, accordingly, push prices downward.
Monopolizers, brokers and speculators of lands, villas and apartments were behind the cohesiveness and stability of prices over the past year (2013), particularly in the first half of it.
However, policies of the Ministry of Housing to develop new housing plans and provision of lands and loans came to curb price inflation, he said.
He expected that the price fall will be clearly felt in the peripherals of major cities and smaller towns where finished housing projects, initiated by the Ministry of Housing, will be distributed to citizens at affordable prices and will, hence, lead to price decrease in lands and housing units, which were earlier targeted by land manipulators.
In the mean time, property expert Abdullah Al-Shihri cited other factors supportive to possible price decline of property in the new year, including accessibility to funds, the introduction of the mortgage law and imposition of fees (zakat) on white (vacant) lands.
He said prices of real estate in the past year registered record levels, which made it difficult for seekers of lands or houses to provide the required values despite the fact that the Real Estate Development Fund (REDF) earlier raised property loans to nearly SR500,000.