Introduction: Why Saudi Arabia’s Real Estate Market Attracts Investors
Saudi Arabia’s real estate market is rapidly developing thanks to the government’s Vision 2030 strategy and massive investments in the construction sector. According to Arab News, the volume of real estate transactions in the first half of 2024 grew by 38% compared to the previous year, with steady price increases in major cities (Riyadh, Jeddah). The market’s opening to foreign investors is making real estate investments in Saudi Arabia increasingly popular and promising.
Key factors of attractiveness:
• Liberalization of laws that simplify foreign investments.
• Population influx into megacities, driving demand for residential and commercial real estate.
• Development of Red Sea resort areas and multifaceted giga-projects.
Vision 2030 and the Growth Drivers of the Real Estate Market
Launched in 2016, the national Vision 2030 strategy aims to diversify the economy and reduce dependence on the oil sector. One priority is to expand residential and commercial development. The Saudi Arabian government plans to:
• Build over 1 million new homes by 2030.
• Simplify regulations on foreign property ownership.
• Create several “giga-projects” (NEOM, Qiddiya, Diriyah Gate, etc.).
• Increase the homeownership rate among citizens from 47% to 70%.
A key player in implementing Vision 2030 is the Public Investment Fund (PIF), which allocates enormous budgets to build new cities and improve infrastructure.
Luxury Residential Districts: Price Dynamics and Demand
In major cities like Riyadh and Jeddah, there is active development of luxury residential complexes:
Riyadh
• Apartment prices rose on average by 13% in 2023.
• Housing demand increased by nearly 45% due to young professionals and foreign specialists.
• Projects by ROSHN (a subsidiary of PIF) include building 400,000 homes in the Sedra district and other suburbs.
Jeddah
• In 2022, housing prices surged significantly, followed by a slight correction (-1%) in 2023, creating a window of opportunity for more profitable purchases.
• The active renovation of the waterfront and the $20 billion Jeddah Central project promise further price growth.
Tip: By purchasing luxury apartments or villas in rapidly developing neighborhoods, investors can expect stable capitalization growth and high rental returns.
Resort Real Estate on the Red Sea and Tourism Projects
Tourism is one of the main growth drivers envisioned in Vision 2030. Saudi Arabia aims to reach 150 million tourists annually by 2030. Key projects:
• The Red Sea Project
50 luxury resorts on islands, ~8,000 hotel rooms, +1,000 villas.
The first phase opens in 2024–2025.
• AMAALA
A world-class resort with yacht marinas and premium spa complexes.
Focus on wellness and VIP tourism.
• AlUla
A historic region with UNESCO sites, being developed as a cultural-tourist hub.
Boutique hotels, glamping sites, and art festivals.
• Qiddiya
An “entertainment city” with a Six Flags theme park, a Formula 1 track, a water park, and hotels.
Main facilities are planned to open by 2025.
Takeaway for investors: Real estate (villas, apartments, apart-hotels) in Red Sea tourist areas can offer high returns due to the increasing influx of foreign and domestic tourists.
Giga-Projects: NEOM, Diriyah Gate, New Murabba, and More
Giga-projects represent large-scale initiatives that fundamentally reshape Saudi Arabia:
• NEOM
Budget: $500+ billion, located in the northwest of the kingdom.
Futuristic districts: The Line (car-free city), Oxagon (port and industrial hub), Trojena (ski resort).
Focus on green energy and innovation.
• Diriyah Gate
Cost: $63 billion.
Historic area near Riyadh, a UNESCO World Heritage site.
Plans include luxury housing, museum complexes, and upscale hotels.
• New Murabba
A new business center in Riyadh featuring “the Mukaab” (a 400m-high cube).
Over 100,000 housing units, offices, and commercial spaces.
• Jeddah Central
Cost: $20 billion.
Redevelopment of Jeddah’s coastal area, with plans for an opera house, modern stadium, and an aquarium.
Investment advantage: Investing in the early stages of these projects provides an opportunity for significant capital appreciation by the time they are completed (5–10 year horizon).
Commercial Real Estate: Offices, Shopping Centers, Hotels
Saudi Arabia’s ongoing economic diversification and the rise of the private sector are boosting demand for commercial spaces:
• Offices
In Riyadh, Class A office rents increased by 20.8% in one year.
Vacancy rates in the premium segment are under 2%.
• Shopping Centers and Retail
Growth of major mega-malls linked to tourism zones and new districts.
Increasing consumer spending among the population.
• Hotels and Hospitality Residences
Rising domestic and inbound tourism.
Hosting international events (FIFA World Cup 2034, Formula 1) and festivals (Riyadh Season).
For investors, the commercial sector can yield higher returns provided they select quality projects and locations with limited supply.
Legal Framework and Conditions for Foreigners
Recent years have seen Saudi Arabia significantly relax foreign investment rules:
• Expat residents may own one residential property.
• A new law is in progress to allow foreigners to own all types of real estate, including commercial and agricultural land.
• Restrictions on purchasing property in Mecca and Medina have been eased (under specific regulations).
• Premium Residency (long-term residency without a local sponsor for wealthy individuals) is available.
Moreover, one can invest in local REIT funds or purchase shares of real estate companies listed on the Tadawul stock exchange.
Keep in mind: When buying property, factor in the 15% VAT and potential fees (for example, the 2.5% “White Land Tax” on undeveloped urban plots).
Price Forecast and Main Risks
Analysts predict that Saudi Arabia’s real estate market volume may exceed $100 billion by the end of the decade. Key drivers:
• Young population: over 70% of Saudis are under 40.
• Major infrastructure investments.
• Emphasis on tourism and global events (Expo 2030, FIFA World Cup 2034).
• Government mortgage support and housing subsidies.
Potential risks include rising construction material costs, possible labor shortages, and the economy’s dependence on oil prices. However, demand still outstrips supply, particularly in major cities and tourist regions.
Source
Practical Tips for Real Estate Investors in Saudi Arabia
1. Choose a Reliable Developer: Prefer projects backed by PIF or reputable developers with a solid track record.
2. Study the Location: Riyadh offers high rental yields, Jeddah shows potential for growth due to waterfront redevelopment, and Red Sea resorts promise long-term capital gains.
3. Check the Property’s Legal Status: Verify escrow accounts, licenses, and request title documents from the developer.
4. Focus on a Long-Term Strategy: Main benefits (price appreciation, rental income) typically materialize over 5–10 years as mega-projects progress.
5. Use Professional Management: If you live abroad, hire a property management firm for tenant sourcing and maintenance.
Conclusion
Thanks to Vision 2030 and the development of extensive giga-projects, Saudi Arabia’s real estate sector has become one of the most attractive markets for foreign investment. Rapid price growth, market liberalization for non-residents, and government support create exceptional opportunities for those seeking high-potential assets. Nonetheless, it’s crucial to thoroughly research the location, the developer, and legal requirements before buying to mitigate risks and maximize returns during this “golden era” of Saudi real estate.
Also recommended reading:
• Investing in NEOM Hidden Marina: The Investment Appeal of the New Mega-Project in Saudi Arabia
• Where Does Real Estate Purchase Grant Residency? The Most Affordable Countries in 2025
• Best Countries for Digital Nomads 2025: Where It’s Comfortable to Live and Work?
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