Saudi Arabia’s Real Estate Market Booms With $75.7 Billion Amid Economic Diversification Efforts

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A report claims that the need for housing in the Kingdom will increase, with more than 800,000 new units required by 2030 in Saudi Arabia, Kuwait, and Oman.

Saudi Arabia’s real estate industry continues to grow with its massive expansion in 2024, with transactions rising 47% yearly to $75.7 billion.

The growth shows a high demand for housing and large-scale urban development as the Kingdom pushes ahead with its plans for economic diversification.

Sakan data shows that real estate sales in the Gulf Cooperation Council reached $383 billion, of which $207 billion happened in Dubai, or 54% of the total.

Sakan provides first-ever residential market report that gives insights into investment trends, affordability, and increases in new developments in Saudi Arabia, UAE, Kuwait, Qatar, Bahrain, and Oman.

There is growth in real estate industry due to population growth and the government, which is actively sponsoring infrastructure projects to bring about a change in the urban landscape.

The figures align with the statistics company Statista’s forecast that the GCC real estate will grow to $4.67 trillion by 2025.

Gulf economies, historically known to rely on oil earnings, are now trying to diversify their source of income and maintain long-term economic stability, so they are actively investing more in real estate development.

The CEO of Sakan, Abdullah Al-Saleh, affirmed the GCC real estate market is expanding at an unprecedented rate, with sales of more than $383 billion.

He adds that, at Sakan, they are committed to bridging the gap between buyers, investors, and real estate prospects by being transparent and making real estate accessible to all.

A report claims that the need for housing in the Kingdom will increase even more, with more than 800,000 new units required by 2030 in Saudi Arabia, Kuwait, and Oman.

By the end of the decade, Riyadh, the centre of this expansion, is predicted to have 9.6 million residents due to an influx of foreigners and Vision 2030 programs that increase homeownership.

The report warned that affordability continues to be a challenge, as house rent increases by 10.6% in 2024 due to the growing pressure on supply.

The findings point out that the reason for the property boom in the Gulf is due to the growing demand of foreigners shifting from renting to owning houses.

In Saudi Arabia, remittance outflows increased from $31.2 billion in 2019 to $38.4 billion in 2023. It shows a robust financial commitment from foreign professionals. Dubai is taking advantage of this trend by recently approving 457 plots for freehold conversion to attract foreign buyers.

Sakan data reports that the Saudi Arabian market benefits from the arrival of foreign professionals looking for long-term residency with increasing investor confidence.

Expatriates are 52% of the Gulf’s population, and as the government is introducing residency incentives and mortgage-friendly policies, their role in the real estate market is increasingly becoming significant.

Dubai continues to dominate the luxury real estate market, with 388 transactions above $10 million in the 12 months leading up to Q3 2024, the highest number globally.

The report stated that Saudi Arabia is expanding its luxury real estate presence, with The Red Sea Project attracting high-net-worth investors and Qatar’s Qetaifan Island North becoming the prime destination for ultra-luxury development.

The Red Sea Project is a tourism megaproject under construction on the Red Sea coast of Saudi Arabia. The project aims to have 50 hotels with 8,000 rooms and more than 1,000 residential properties across 22 islands.

Sakan noted that branded residences like luxury homes linked to hotel chains are becoming increasingly popular across the region.

The Middle East now constitutes 12% of global supply, with Dubai being at the front of the line, with 121 branded residence projects in development.

The report anticipates that there will be strong demand for residential and commercial real estate, given that by 2030, 84.3% of the GCC population will reside in urban areas. Still, there are concerns about being affordable. It noted that with government supporting initiatives, increasing interest from foreign investors, and changing expat patterns, there is no need to worry as these factors will drive the market for continued growth.                                      

As Saudi Arabia and the United Arab Emirates (UAE) implement measures for economic diversification with their mega-giga projects, the Gulf’s real estate sector is becoming a critical driver of economic diversification.