Saudi Arabia’s Property Revolution: Over 1 Million New Homes by 2030
As part of the Kingdom’s visionary Vision 2030 strategy, Saudi Arabia is undergoing a housing transformation that promises to deliver over 1 million new homes by the end of the decade. This bold initiative aims to diversify the economy, boost homeownership, and meet the growing demand for affordable housing across the nation. With a total project value of $1.3 trillion and $164 billion in contracts awarded in 2024 alone, Saudi Arabia’s real estate market presents a unique opportunity for both homebuyers and investors.
Read: Saudi Arabia’s Luxury Real Estate Market
Vision 2030: Driving Real Estate Growth
Since the introduction of Vision 2030, Saudi Arabia has made impressive strides in reshaping its real estate sector. The government has set an ambitious target of increasing homeownership from 64% to 70% by 2030. Key programs such as Sakani and Wafi have played pivotal roles in making housing more accessible and affordable for Saudi citizens, thereby fueling demand.
Despite the plans for over 1 million new homes, only 4% of the proposed residential units have been completed since 2016. However, the scale and value of the projects highlight the Kingdom’s strong commitment to addressing housing needs. ( Vision 2030 sparks major growth in Saudi Arabian real estate )
Read: Saudi Property Expo 2024
NEOM: A Futuristic Real Estate Opportunity
Among the numerous developments underway, NEOM stands out as the crown jewel of Saudi Arabia’s Vision 2030. This futuristic, sustainable city is valued at $28.6 billion and is set to redefine urban living with cutting-edge technology, smart city infrastructure, and luxury residential units. As one of the most anticipated projects, NEOM has the potential to attract international investors and high-net-worth individuals seeking unique, tech-driven real estate opportunities.
For investors looking to secure long-term returns, NEOM offers a chance to invest in a project that is shaping the future of Saudi Arabia and gaining global attention. ( About NEOM )
Read: Saudi Property Investments
Riyadh: The Capital of Growth
Riyadh, the Kingdom’s economic powerhouse, has experienced a tremendous surge in property prices in recent years. Over the past three years, apartment prices in Riyadh have risen by 58%, while villa prices have increased by 38%. For the first time, the capital’s villa prices, at SAR 5,155 per square metre, have surpassed those of Jeddah, highlighting the growing demand for housing in Riyadh.
The rise in housing demand is driven by population growth and a thriving economy, making Riyadh an increasingly competitive market for homebuyers and investors. The city’s real estate boom extends beyond residential properties, with significant expansions in office and retail sectors. By 2030, Riyadh will have added 4.6 million square metres of new office space and 2.6 million square metres of retail space, further establishing itself as a regional business hub. ( Riyadh to be Among Top 15 Fastest Growing Cities by 2033 )
Read: Income Tax in Saudi Arabia for Foreigners
Act Now in Riyadh’s Competitive Market
For potential homebuyers, the rising prices in Riyadh signal the need to act quickly. As demand continues to grow, delaying a purchase could lead to higher costs in the future. Buyers who enter the market now are likely to benefit from strong returns as the city’s real estate sector continues to expand.
Rising Interest Rates: A Challenge for Buyers and Developers
While the real estate market is booming, the rapid rise in interest rates has created challenges for both buyers and developers. From just 1% in 2021, interest rates surged to 6% in 2024, making borrowing more expensive. This increase has particularly impacted middle-income buyers, although government programs like Sakani have helped cushion the blow for lower-income families by offering affordable financing options.
For buyers concerned about rising interest rates, fixed-rate mortgages could offer stability. These loans allow buyers to lock in manageable interest rates and avoid future rate hikes, providing security in a volatile market.
Read: Tax in Saudi Arabia for Foreigners 2024
Expanding Beyond Housing: Office, Retail, and Hospitality Growth
Saudi Arabia’s real estate boom is not limited to housing. The office, retail, and hospitality sectors are also experiencing significant growth. As Riyadh and other cities expand, millions of square metres of commercial real estate are being developed, catering to international businesses and the Kingdom’s growing domestic demand.
The hospitality sector is another key area for investment, with 362,000 new hotel rooms in the pipeline. Saudi Arabia’s aim to attract 150 million visitors by 2030, up from 27.4 million in 2023, is driving demand for luxury hotels and accommodation. Religious tourism, international events, and business travel are all contributing to the Kingdom’s tourism growth, making the hospitality sector a promising avenue for investment.
Read: Types of Taxes in Saudi Arabia
Invest in Saudi Arabia’s Hospitality Sector
For investors seeking opportunities beyond residential properties, the hospitality industry offers strong potential. The 2030 World Expo, which will bring global attention to Saudi Arabia, is expected to boost the economy and increase demand for hotel accommodation. Now is the ideal time to invest in this growing sector, with luxury hotels and tourist-focused developments poised to generate significant returns. ( Saudi Arabia: A Premier Destination for Tourism Investment )
Managing Supply and Demand: A Balanced Real Estate Future
While Saudi Arabia’s real estate market is booming, there are concerns about oversupply, particularly in the luxury property segment. Developers have heavily focused on high-end housing, but the real demand lies in affordable and mid-range homes. As prices rise, the issue of affordability becomes more pressing for many Saudis.
The government is aware of these challenges and is taking steps to balance the market. Upcoming changes to foreign ownership laws are expected to open new investment opportunities and help diversify the supply of housing options. These reforms will be critical in ensuring that the real estate market remains sustainable and accessible to both local buyers and international investors.
Read: Income Tax in Saudi Arabia for Expats
Diversify Your Real Estate Portfolio
To mitigate potential risks, investors should consider diversifying their portfolios by including mid-range housing developments and commercial properties. While luxury homes may offer high returns in the short term, long-term growth will likely come from meeting the increasing demand for affordable housing. By diversifying, investors can position themselves for stable returns across different segments of the market.
A Real Estate Market Full of Opportunity
Saudi Arabia’s real estate market is undergoing a transformative boom, driven by the Vision 2030 initiative and the government’s commitment to increasing homeownership. With over 1 million new homes planned by 2030, the opportunities for homebuyers and investors are vast.
While rising interest rates and affordability concerns need to be addressed, those who act now will likely benefit from strong returns. For investors, diversification and a focus on affordable housing and hospitality will provide long-term success in this dynamic, fast-evolving market.
