Riyadh house prices rocket 90%

House prices in Riyadh rocketed by as much as 90 percent in the first half of this year, Global Property Guide said in a study published on Wednesday.

The property information firm said Saudi Arabia was currently going through a real estate boom, fuelled by record oil revenues, with house prices in Riyadh and Makkah seeing the most significant jump.

Global Property Guide said the price of land in the Saudi capital currently ranges from 400 riyals ($107) per square metre to 4,000 riyals per square metre, compared to just 156 riyals per square metre five years ago.

It said the most expensive land in Saudi was in Makkah, where land prices have reached as much as 400,000 riyals per square metre.

"The growing demand combined with limited supply of housing units caused a surge in real estate prices over the past years," the report said.

"Huge oil revenues from skyrocketing oil and petroleum prices in the global market is the primary driver for the strong economic growth and rising purchasing power of Saudis.

"Investments from neighbouring Gulf states and liberalisation of real property laws added to the boom in Saudi's real estate market."

To cater for this real estate boom, residential expenditure is projected to reach 65 billion riyals by 2010, up from 47 billion riyals in 2007, Global Property Guide said.