Saudi Arabia’s real estate market has reportedly recorded its largest drop since the start of the year following the announcement of a new tax on unused land.
Arab News reports that the market is down 58.6 per cent following a 56.7 per cent drop in weekly sales to SAR 1.9bn ($506.6m), the lowest level in a decade.
It cited real estate experts as saying the drop in sales was caused by low demand following the implementation of the so called white land tax, leading buyers to wait for prices declines.
Giant Construction for real estate owned Hamad Al-Dossary told the publication that sales would only pickup if prices reduced to levels to more affordable levels.
Arab News also cited Jabrah Real Estate Company chief executive Ali Al-Tamimi as saying a government announcement of 100,000 residential units that are ready to be delivered has increased competition in the market.
He added that more affordable projects needed to be launched to offset the decline in activity.
“It will move toward rigidity if the gap between prices and buyer capacity persists,” he was quoted as saying.