Residential rents drove annual inflation in the Kingdom to rise to 1.7% in September.
This is compared to levels ranging between 1.5% and 1.6% in the previous six months.
Details
The consumer price index (CPI) rose for the third consecutive month in September, catalyzed by a 9.3% increase in the housing, water, electricity, gas, and other fuels category.
The General Authority for Statistics noted that this category was driven by an 11.2% rise in paid residential rents last month.
This was influenced by a 10% increase in apartment rental prices.
The increase in residential rent prices led annual inflation rates to swell in September, given the significant weight of this category at 25.5%.
So what
The inflation rate recorded in September is the highest one registered since February.
Residential rents have increased for the 31st consecutive month, marking the “fastest pace ever” since the General Authority for Statistics began taking records in 2013.
Some Context
The rise in rental prices is attributed to increased demand for housing as global companies continue to establish regional headquarters in Saudi Arabia.
This comes amid a decline in construction activity due to a drop in new residential mortgage financing.
The International Monetary Fund, in its report released in September, attributed rising rents to the influx of foreign labor and major redevelopment plans in Riyadh and Jeddah.
