Saudi Arabia Real Estate Market

Saudi Arabia Real Estate Market Size:

Saudi Arabia real estate market size reached US$ 67.2 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 126.8 Billion by 2032, exhibiting a growth rate (CAGR) of 7.30% during 2024-2032. The increasing urban development, growing emphasis on sustainability, shifts in demographics, and various favorable housing policies implemented by the government are some of the key factors driving the growth of the market across Saudi Arabia.

Saudi Arabia Real Estate Market Analysis:

• Major Market Drivers: The rising urban population and the escalating demand for residential and commercial properties represent the major drivers of the market. In addition to this, favorable economic conditions and lower interest rates are further catalyzing the market growth.
• Key Market Trends: Technological advancements, such as blockchain for transparent transactions and virtual reality for property showcasing, represent the key trends of the market. Besides this, sustainable construction practices and a shift towards suburban living are positively impacting the market.
• Competitive Landscape: Some of the major market players in the Saudi Arabia real estate industry include Abdul Latif Jameel, Dar Ar Alkan, Emaar, Jabal Omar Development Company, Jenan Real Estate Company, Kingdom Holdings Company, and SEDCO Development (SEDCO Holding), among others., among many others.
• Challenges and Opportunities: The market faces various challenges including regulatory uncertainties and market fluctuations. However, the market also faces several opportunities such as increasing investments in emerging urban areas with the potential for development and revitalization presents lucrative opportunities in the market across Saudi Arabia.

Saudi Arabia Real Estate Market Trends:

Rising Government Initiatives

Increasing investments in infrastructure, Urban Development, and tourism projects by the government of Saudi Arabia are driving the growth of the market. For instance, the Saudi government’s Vision 2030 aims to diversify the economy away from oil dependency. According to the industry report, reforming the housing sector in Saudi Arabia and improving the access of Saudi families to housing that needs the needs is a major element of the Kingdom's Vision 2030 period. Since 2017, when around 1.6m Saudi nationals were on waiting lists for government housing programs, the Ministry of Municipal and Rural Affairs and Housing (MoMRA) has rolled out several initiatives to increase the availability of affordable housing and improve accessibility to financing options. The Vision states that ‘housing is the foundational asset that is capable of shaping and influencing the vibrancy of families, communities, and broader society.’ Transforming the housing sector and increasing investment in housing meets the objectives of Vision 2030 in multiple ways including creating sustainable job opportunities, increasing the contribution of the private sector, engaging non-governmental organizations (NGOs), and driving economic growth. This is boosting the Saudi Arabia real estate market statistics market significantly.

Growing Population and Urbanization

Saudi Arabia's population is growing rapidly, leading to increased demand for housing, commercial spaces, and infrastructure. The urbanization trend is particularly strong, with more people moving to cities, driving the need for new residential and commercial developments. According to the data from the UN-Habitat, Saudi Arabia’s cities are urbanizing fast with urban population almost tripled from 9.32 million in 1980 to 29.8 million in 2014. In addition to this, urbanization is expected to continue its increase to reach up to 97.6 % by the year 2030, out of which Riyadh (the capital) will reach 8.2 million out of which 75% will be Saudis. Considering the current growth rates and the Kingdom’s long-term demographic estimates, the annual demographic growth in the Kingdom is expected to reach an average of 0.87 %, bringing the number to about 31.457 million in 2030, of which 4.214 million are non-Saudis. Most of the population is concentrated in the capital Riyadh, the secondary cities of Jeddah and Dammam, and the holy cities of Mecca and Medina. This is expected to fuel the Saudi Arabia real estate market revenue over the coming years.

Rising Economic Reforms and Foreign Investment

Economic reforms aimed at creating a more business-friendly environment have attracted foreign investments in the real estate sector. Policies that allow greater foreign ownership and the establishment of real estate investment trusts (REITs) are enhancing market liquidity and encouraging both local and international investors to participate in the market. For instance, in January 2024, Mohammed Elkuwaiz, chairman of the Board of Directors of the Saudi Capital Market Authority (CMA), said that the authority intends to allow non-Saudis to invest for the first time in listed companies that own real estate in the holy cities of Makkah and Madinah. The authority is working to diversify financing products in the capital market during the current year by developing the debt market, real estate contributions, and several developments in the funds sector. The CMA had allowed financial market institutions to accept contributions from non-Saudis in a real estate fund that invests part or all its assets in a property located within the borders of the cities of Makkah and Madinah. He explained that there is still a great opportunity in the real estate sector to benefit from different types of financing in the capital market, whether through offering and listing or benefiting from debt markets.

Saudi Arabia Real Estate Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional levels for 2024-2032. Our report has categorized the market based on property type.

Breakup by Property Type:

• Residential Real Estate
  • Apartments
  • Villas
  • Others
• Commercial Real Estate
  • Offices
  • Retail
  • Hospitality
  • Others
     

The report has provided a detailed breakup and analysis of the market based on the property type. residential real estate (apartments, villas, and others) and commercial real estate (offices, retail, hospitality, and others).

The residential real estate sector in Saudi Arabia is driven by the rapidly growing population and organization. Government initiatives such as the Sakani program aim to increase homeownership rates by providing affordable housing. In addition to this, Vision 2030’s focus on diversifying the economy and developing infrastructure is leading to new residential projects, attracting both local and foreign investments.

In the commercial real estate sector, the demand is propelled by economic diversification efforts under Vision 2030. Major developments like the King Abdullah Financial District and NEOM are creating new business hubs. The increased foreign investment, favorable business regulations, and a growing emphasis on tourism and entertainment are further boosting the demand for commercial properties.

Breakup by Region:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region
   

The report has also provided a comprehensive analysis of all the major markets in the region, which include the Northern and Central region, Western region, Eastern region, and Southern region.

The northern and central region of Saudi Arabia including Riyadh, is experiencing rapid real estate Riyadh's status as the capital city and economic hub drives demand for residential, commercial, and office spaces. Government initiatives such as King Salman Park and the Qiddiya Entertainment City Project are further boosting real estate development in this region.

The western region, encompassing Jeddah and Makkah, is a focal point for real estate due to religious tourism and business opportunities. Significant projects include the Jeddah Tower and various hospitality developments. The region's strategic location on the Red Sea also supports ambitious projects like the Red Sea Project, enhancing its real estate market’s attractiveness.

The easter region, with key cities such as Dammam and AI Khobar, is crucial for Saudi Arabia’s oil industry. Real estate demand here is driven by the presence of major oil companies and industrial activities. The region is seeing a rise in residential and commercial developments, supported by government plans to diversify the economy and improve infrastructure.

The southern region, including cities such as Abha and Jazan, is witnessing growing real estate development due to tourism and agriculture. Government efforts to enhance the region's infrastructure and tourism appeals, like the development of Jazan Economic City, are driving demand for residential, commercial, and hospitality real estate, contributing to overall market growth.

Competitive Landscape:

• The market research report has also provided a comprehensive analysis of the competitive landscape in the market. Detailed profiles of all major companies have been provided. Some of the major market players in the Saudi Arabia real estate industry include Abdul Latif Jameel, Dar Ar Alkan, Emaar, Jabal Omar Development Company, Jenan Real Estate Company, Kingdom Holdings Company, SEDCO Development (SEDCO Holding), among many others.
  
  (Please note that this is only a partial list of the key players, and the complete list is provided in the report.)
   
• The competitive landscape of Saudi Arabia real estate market is highly competitive, characterizing key players including Jabal Omar Development, Dar Al Arkan, and Emaar The Economic City. These players lead extensive residential, commercial, and mixed-use projects. The Public Investment Fund (PIF) is a significant player, driving large-scale developments like NEOM and the Red Sea Projects. For instance, in December 2023, Jabal Omar Development Company signed a strategic partnership with Isnad Real Estate Company to launch the Jawhara Jabal Omar opportunity, spanning an area of over 13,000 square meters within the stages of the Jabal Omar project. The opportunity consists of two land plots near the Holy Mosque and provides integrated infrastructure.

Saudi Arabia Real Estate Market News:

• In May 2024, The New Murabba Development Company, a subsidiary of Saudi Arabia's Public Investment Fund (PIF), opened invitations to premier design and engineering firms worldwide for the next phase of the Mukaab project.
• In December 2023, The Board of Directors of NEOM announced Norlana, an ultra-modern active lifestyle community, as the latest addition to the evolving regional development in northwest Saudi Arabia.
• In February 2024, The Board of Directors of NEOM announced Elanan, an exclusive guest retreat that redefines luxury and well-being experiences, set in the heart of nature. Its announcement marks the latest addition to NEOM – the evolving sustainable development taking shape in northwest Saudi Arabia.

Saudi Arabia Real Estate Market Report Scope:

Key Questions Answered in This Report:

• How has the Saudi Arabia real estate market performed so far, and how will it perform in the coming years?
• What has been the impact of COVID-19 on the Saudi Arabia real estate market?
• What is the breakup of the Saudi Arabia real estate market on the basis of property type?
• What are the various stages in the value chain of the Saudi Arabia real estate market?
• What are the key driving factors and challenges in the Saudi Arabia real estate market?
• What is the structure of the Saudi Arabia real estate market, and who are the key players?
• What is the degree of competition in the Saudi Arabia real estate market?

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia real estate market from 2018-2032.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia real estate market.
• Porter's five forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia real estate industry and its attractiveness.
• The competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.