Developers are expected to deliver 15,600 residential units over the next three years in different regions of Jeddah. (SPA)

Prices of apartments, houses and land are expected to drop by 20 to 30 percent in Jeddah next year, a study has found.

Developers are expected to deliver 15,600 residential units over the next three years in different regions of Jeddah, which will further bring down prices, local media reported Thursday, citing the survey.

The study has attributed the decline in real estate prices to the mortgage plans currently in place, drop in oil prices and the planned introduction of a new system to impose fees on vacant plots of land.

The survey said the real estate market in Jeddah will witness, by the end of 2015, a decrease in the total value of transactions by 19.9 percent, at the level of almost SR187.9 billion compared to the corresponding period last year, that is SR234.5 billion.

According to the study, the real estate sector will enter the year 2016 with a new agenda as it will coincide with low oil prices and prospects of a deficit in the Kingdom’s budget. This will be in addition to the implementation of the real estate regulations to repay 30 percent of the mortgage, canceling the deeds of expanded areas of land, delay in some projects of the Housing Ministry and the imposition of fees on vacant plots of land.

The study noted that the coming three years will witness the delivery of 5,200 apartments in land to the south of the sports stadium, and another 10,500 apartments at the housing project located behind the Prince Fawaz project. This will increase supply significantly.

The study concluded that the property sector in Jeddah increased tenfold between 2006 and 2013. Real estate experts have forecast the decline in residential land prices to be not less than 20 percent, while the decline in residential buildings by 10 percent, and around 7 percent in small villas.

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