THE Riyadh real estate market is expected to experience strong demand on the back of improving economic indicators like oil prices and real GDP growth now projected at 5.7 per cent, says a Jones Lang LaSalle report.

This positive outlook is further strengthened by the government’s recently announced stimulus package that aims to invest significant public capital into a broad range of public sector developments and infrastructure projects, says the Riyadh Real Estate Market Overview – Q1 2011.

The report covering the Riyadh office, residential, retail and hospitality market segments, says the residential sector appears most promising among all real estate asset classes in Riyadh.

One reason is the strong national population growth combined with the increasing number of expatriates entering the country to work in key sectors like construction and health. Consequently, rental growth is rising faster than inflation. In terms of development, more than half of the stimulus package is allocated to housing in order to build 500,000 additional housing units for Saudi families.