It is expected that prices on Saudi Arabia’s residential market will remain supported by a high demand even though economic uncertainty and expectations of changes to the legal framework might lead to homebuyers holding back purchases, speculating on lower prices, according to Alkhabeer Capital’s Global Real Estate Report.

Expectations like the imposition of a white land tax are likely to lead to lower prices in the near future, stated the asset management company. It is however not expecting “a major downward shift in house prices”, largely because of the high demand driven by a growing population, according to its report.

The Saudi Arabian housing market is undersupplied, which is part of the reason that led to the implementation of a National Transformation Plan in April. The plan pays tribute to the recent drop in oil prices and the hole in the national budget caused by this drop and aims to close the housing gap by improvements to the legal framework and through new initiatives.