Saudi Arabia: In less than a month, more than 300 apartments in a new complex in Saudi Arabia's capital, Riyadh, were sold for cash without the need for any advertising on the part of the owner of the complex.
It should come as no surprise that the real estate market is booming in the country, which exports the most oil in the world, given the economic benefits of rising energy prices.
The rush for homes worth 1 million riyals ($266,400), according to Abdulsalam Almajed, chief executive officer of Almajdia, the company that built the block of lavish apartments, also reflects the social and economic change that has reshaped the state. giving and it is being accelerated. The Crown Prince's overhaul program.
According to Almajed, head of the family-owned development company, there has been a change in mindset, as more Saudis adopt the more tolerant way of life promoted by his company. Saudi designs today display beautiful creativity.
Since being promoted to the position of de facto ruler by his father, King Salman in 2015, Mohammed bin Salman has experienced increased political repression and centralized power; However, he has also eased restrictions on entertainment and mixing of men and women and is working to reduce the country's dependence on oil.
Ten years ago, many landlords did not even give rent to women as they often required the consent of a male guardian. Today, more women are entering the workforce, and 30% of Almajdia buyers are women, either buying investment properties or their own homes.
They support a recovering economy that has been replaced by energy markets. Despite widespread concerns about recession and rising inflation due to Russia's war in Ukraine, Saudi Arabia's economy is the fastest growing of the group of 20 countries. This is because oil has averaged over US$100 a barrel this year.
The non-oil economy grew by 5.4% during the second quarter, and as a result, GDP grew by 11.8%, surpassing its level since the end of 2019 before the pandemic hit.
Saudi Aramco, a state-owned energy company, has reported the highest quarterly adjusted profit of any publicly traded company worldwide. A private sector dependent on government contracts is feeling better as a result of a massive influx of money into Saudi Arabia's coffers and increased investment from the kingdom.
As the state engages in a building spree that includes shopping malls and parks as well as grand plans for a new city built from scratch and a luxury tourism development on the Red Sea, an annual 64 percent increase in capital expenditure in April to June % has increased. Despite the prediction of lower spending in the initial budget of this year, overall spending grew by 16%.
Normally, the Saudi elite flee to the cooler climates in Europe during the summer, but Riyadh's newest fine dining establishments are crowded. The most popular dinner seatings at Latin American chain Coya, from 8.30 to 9 p.m., are booked up to a month in advance.
The sum of cash withdrawals and point-of-sale transactions, an indicator of consumer activity, rose 9% year-on-year in June after hitting a record high in March. Last month's inflation rate was 2.7%, or about a third of what it was in the US or the euro area.
In incentives through sovereign funds and long-term initiatives such as the production of electric vehicles and tourism, the finance ministry is attempting to break the habit of oil-tracking spats and cuts.
According to a Bloomberg survey of economists, this year's economic growth is projected to be 7.6%, but by 2024, the growth rate may slow to 2.5%. Crude oil is currently trading at around US$90 a barrel as concerns about a future economic slowdown and the prospect of an increase in Iranian supplies if the nuclear deal is revived loomed large.
According to Monica Malik, chief economist at Abu Dhabi Commercial Bank, if oil prices fall again, activity will slow down once again. But a lot of good things are coming together at the moment.
Almajdia offers wealthy professionals open plan homes with lots of natural light. In the past, many Saudis valued privacy and chose homes with thick walls and small windows. But that is changing as a result of social opening up, smaller families and tighter budgets.
Modern complexes have cafes, gyms and nurseries and are built around communal courtyards.
Prince Mohammed announced plans to double Riyadh's population and lure millions of expatriates, and the style is reminiscent of high-end housing in Dubai, the regional hub with which he wants to compete. This is a key factor in the optimism of Almajed, which has encouraged the real estate developer to start preparing for an IPO. He said that as the population increases, they will need more flats.
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