The Incredible Real Estate Boom in Saudi Arabia in 2024!

The real estate market in Saudi Arabia is expanding at an unprecedented rate, with transactions doubling in value and happening at a faster pace due to the country’s cheap lending rates and growing demand for residential real estate.

Thanks to extensive infrastructure projects and government initiatives to promote transparency and encourage investment, major Saudi cities like Riyadh and Makkah Al-Mukarramah are becoming vibrant hubs for investment under Vision 2030, drawing capital from both domestic and foreign sources.

Record-Breaking Transactions

In this ever-changing scenario, the Saudi real estate market seems poised for continued expansion, solidifying its standing as an investor’s first choice for long-term prospects in a secure atmosphere.

In specifics, the real estate market in Saudi Arabia has benefited from lower interest rates and increased demand for residential units in major cities. As a result, transactions in the Kingdom’s real estate market have reached $50 billion (SAR 188 billion), up 35% from the same period the previous year.

According to official Saudi figures, over 162,000 recorded real estate transactions took place in the first nine months of this year. Of these, 86% were in the residential sector and 10% were in the commercial sector. About 60% of the deals’ value, or $27 billion (101 billion riyals), was realised by the Riyadh region. The Makkah region came in second with 19%, or $11.8 billion (44.3 billion riyals), in value.

In this context, real estate expert Engineer Ahmed Al-Faqih said that the rise in transactions shows investors’ faith in the Saudi market because of significant Riyadh real estate projects, which resulted in the capital acquiring half of the volume of transactions in the first nine months of 2024.

Al-Faqih went on to say, “The increase in deals is indicative of the flow of capital into the Saudi market as a result of new laws and increased openness, which has elevated the Kingdom to the 12th place in the world for real estate transparency. This has drawn more capital and increased the number of real estate transactions.” With more investment opportunities, he predicted that growth could surpass 35% moving forward.

Real Estate Market Dynamics

Knight Frank claims that the cumulative value of the “Vision 2030” initiatives initiated over the previous eight years has topped $1.3 trillion.

As for the real estate market, expert Saqr Al-Zahrani told the Asharq Al-Awsat newspaper that supply and demand are what drive it. He anticipates that lower interest rates will boost demand for real estate in the final quarter of 2024 because they will result in lower financing costs, which will entice investors to seize the chance.

Al-Zahrani stated that the increase in agreements in Riyadh is attributable to the city’s status as a destination for internal migration and investment possibilities, which are fuelled by infrastructure projects and population expansion, increasing demand for residential and commercial real estate in the region.

In terms of the Makkah Al-Mukarramah region, Al-Zahrani ascribed its high demand to its status as a sacred place that sees an influx of pilgrims and Umrah performers, as well as large construction projects.

Saudi Arabia: A Beacon of Stability

As the political unrest in the surrounding real estate markets makes Saudi Arabia a secure destination for investors, the expert noted that the country’s political and security stability made it an appealing environment for investments.

He continued by saying that the unrest in the area boosted immigration to Saudi Arabia, which in turn raised the demand for residential and commercial real estate in key cities like Jeddah and Riyadh and attracted capital-seeking stability.

Al Zahrani concluded by predicting that the number of deals would continue to rise in the fourth quarter of 2024 due to the rise in demand for real estate in Makkah during the Umrah and Hajj seasons. The rise in real estate projects in Riyadh, and the continued decline in interest rates, facilitate financing and support the real estate market.

He also identified six factors that will contribute to the long-term growth of the Saudi real estate market, including large-scale infrastructure projects; rising residential demand; government reforms that facilitate ownership and investment; the market’s appeal to foreign investors; the variety of financing options; and political stability in the Kingdom relative to its neighbours.

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