Saudi Real Estate Deals Valued at $71 Billion

The value of total number of real estate transactions in all sectors in Saudi Arabia, which grew by 37% to 236,690 deals, stood at $71.4 billion with residential sales up 38% to 202,661 deals worth $43.94 billion.

The housing supply across major metropolitan areas is set to grow from 3.5 million at present to 3.9 million units by 2028, real estate consultancy Knight Frank said in its latest Residential Market Review report for the Kingdom.

The mortgage issuance rebounded in 2024, up 17.7% to $24.96 billion, on account of more villa purchases and the Government’s Premium Residency Visa unlocked real estate to foreign investors, allowing residency through property purchases priced at over $1 million which has the potential to reshaping demand.

Nearly half of all new jobs in Saudi Arabia over the past five years have been created in Riyadh, fuelled by the Regional HQ Program, driving a substantial increase in housing demand, both for purchase and rent.

According to the real estate consultancy’s estimate, Riyadh’s population is set to grow by 38% from 2022 to 2030, further intensifying housing demand. The government has drawn up plans for 330,000 new units, including 305,000 for Saudi nationals to support 70% homeownership target by 2030.

The prices of apartments grew by 10.6% and villa prices by 6.3% in 2024, with areas like Al Wadi experiencing a 49% rise. Affordability issues and changing lifestyle preferences have been driving a shift toward apartments, the report said.

The housing supply in Riyadh grew by 49,400 units in 2024, bringing the city’s total to 1.4 million homes.

Jeddah

Coming to Jeddah, the $134 billion of investment in real estate and infrastructure is revitalising Jeddah’s economy, reversing internal migration to an extent, boosting job creation, and increasing housing demand.

Jeddah’s housing market saw the highest growth in the value and volume of transactions nationally. Indeed, residential transactions increased by 53% while the total value of deals rose by 43%, in large part driven by the Saudi Central Bank’s down payment reduction from 30% to 5% for Saudi nationals.

The apartment prices rose 3.1%, averaging around $1124 per sq. m., while villa prices dipped 1.7% to around $1,333 per sq. m. in 2024. Premium districts like Al Shatea and Al Khaldiyah maintained higher villa prices, the report said.

“The total housing stock grew by 17,830 new units in 2024, bringing total to 909,360 units. We expect this figure to rise to 965,150 units by 2027. Key projects expected to be delivered in the next three years include Venan Housing Project (1,708 units), Telal Goroob (3,392 units), and Sama Jeddah Housing Project (858 units),” the report noted.

Makkah and Madinah

The report also said that the influx of 18.5 million pilgrims in 2024 contributed to an increase in demand for short-term rentals and serviced apartments. The residential market in Makkah experienced a 12% increase in transaction volumes during 2024 while total deal values rose by 10%.

The residential market in the Madinah experienced growth during 2024, with transaction volumes up 45% and transaction values rising 29%. Apartment prices in Madinah rose by 6.6%, while villa prices remained stable.

The report said that the apartment prices in Makkah increased by 0.5%, while villa prices declined by 1.5% last year. Affordable housing projects, such as Makkah Gate (8,500 units) will contribute to an increase in the total housing stock which is expected to rise by 5.6% to 453,000 unites by 2027.

New developments in Madinah, like Al Jewar Housing Complex (1,227 units), contributed to the 7,040 new units delivered in 2024, with 20,560 more expected by 2027, the report added.