All sources have been thoroughly verified for credibility. Furthermore, a local real estate expert has reviewed and approved the final article.
Yes, the analysis of Riyadh's property market is included in our pack
Considering buying a nice property in Riyadh? You're not alone!
Many people are captivated by Riyadh's modern vibe and dream of owning a luxurious villa or a stylish apartment in this city.
Does it make sense from a financial perspective, though? Are property prices increasing in Riyadh? How much does it cost? Is it better to buy in Al-Malaz or Al-Olaya? Are there any secret taxes? Where can you get a rental yield above 7%?
We've solved it for you.
The SandsOfWealth team has really dug into this market. Actually, we've organized all our findings in a pack. Get it now.
In this article, we're happy to share useful information with you.
How is the real estate market in Riyadh?
Is the property market thriving or struggling? We'll find the answers through data analysis.
Types of properties
In Riyadh, there are various types of properties available for sale, catering to different preferences and needs.
These include apartments, villas, townhouses, and commercial properties like offices or shops.
Apartments often come in different sizes, from cozy studios to spacious multi-bedroom units, while villas offer more privacy and outdoor space. Townhouses provide a balanced mix of both, often with shared amenities.
For those looking to invest or establish a business, commercial properties like offices and shops are also on the market.
Riyadh's real estate market offers a diverse range of property types to suit various lifestyles and purposes.
Buying vs Renting
(If you're buying for yourself and not to rent out)
Whether you're considering settling in Riyadh or already living there, you might be thinking about the pros and cons of buying versus renting a property in this bustling Saudi Arabian city.
Without a doubt, it's better to buy if you want to have long-term financial security in Riyadh.
To make a good decision, consider the property price-to-rent ratio. You can use this number to see how long it will take to recover the property's cost through rental earnings.
According to Numbeo, the property price-to-rent ratio in Riyadh is around 9.14, which is one of the lowest in the world.
It means that, on average, you would only need 9 years of rental payments to actually purchase a property. Buying is clearly an attractive option.
Property prices in Riyadh
On average, according to the last data from Central Department of Statistics and Information, purchasing a property in Riyadh would cost you around $1,730 per square meter.
Obviously, there is a huge spread. A luxury villa in Diplomatic Quarter may have a higher price per square meter than an apartment in Olaya. We actually give you a more detailed breakdown in our pack for buying property in Riyadh and in Saudi Arabia.
To put things in perspective, it is 11 times less (yes, you read it correctly) than the property prices in the center of New York.
However, housing prices in Riyadh are really cheap (-74%) in comparison to Dubai.
The most expensive neighbourhoods in Riyadh are probably Al-Malaz, Al-Faisaliah, and Al-Nahdah; while the cheapest are likely Al-Suwaidi, Al-Murooj, and Al-Urayja.
Trends
First and foremost, we have to acknowledge that Saudi Arabia is, today, a relatively stable country. The last Fragile State Index that has been reported for this place is 67.5.
This is important to remember when wondering if it's a good investment to buy a property in Riyadh.
Besides that, if we look at the IMF's GDP forecasts, Saudi Arabia's economy is expected to soar by 13.8% in the coming 5 years, resulting in an average GDP growth rate of 2.8%.
If you intend to invest in real estate in Riyadh it's a positive signal because when the economy grows, people often experience an increase in wealth, it typically translates to a surge in housing costs.
Also, in Saudi Arabia, the average GDP per capita has changed by 4.8% over the last 5 years. The growth, although minimal, is still present.
This is a strong positive signal: housing prices in Riyadh might become more expensive in 2024 and later on.
Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Saudi Arabia right now.
Buying property in Riyadh
It can be difficult to buy property in Riyadh due to the lack of reliable and updated information available for the buying process. That's why we have created the pack to buy property in Riyadh and in Saudi Arabia.
Buying process
In our pack, we've laid out all the steps involved in the buying process, including the required documents, taxes to be paid, and guidance on finding properties.
Now, we're giving you a more straightforward version to help you grasp the information more easily.
This is the step-by-step process to purchase a property in Riyadh:
- Check foreign ownership regulations for non-GCC nationals.
- Obtain a valid residence visa and iqama (residence permit).
- Choose a property and negotiate the price with the seller.
- Draft a memorandum of understanding (MOU) detailing the terms.
- Hire a local lawyer to verify the property's legal status.
- Obtain a property survey report from the municipality.
- Sign the sales contract (aqd) with the seller.
- Transfer the ownership at the Public Notary office.
- Pay the agreed-upon deposit to the seller.
- Apply for a mortgage (if needed) from a local bank.
- Register the property with the Ministry of Housing.
- Obtain the title deed (malikiyah) from the Ministry of Justice.
Also, if you're not from the country, you might want to check our article on how to buy property as a foreigner in Saudi Arabia.
Make a profitable investment in Riyadh
Better information leads to better decisions. Save time and money. Download our guide.
Where to find a property
Looking for properties in Riyadh? These websites can help.
- Property Finder - A real estate website in Saudi Arabia offering properties for sale and rent, along with commercial listings and new projects.
- Bayut - A real estate website in Saudi Arabia with a wide range of properties for sale and rent, including apartments and villas in different cities.
- Wasalt - A real estate platform in Saudi Arabia offering properties for sale and rent, including apartments, villas, and masterplan projects.
- Realestatesaud - A comprehensive real estate website in Saudi Arabia, offering a wide range of properties for sale and rent, along with helpful resources and a blog.
- Knight Frank - Knight Frank is a global real estate consultancy providing residential and commercial property services, research, and investment solutions.
Also, know that we have included contacts of real estate agencies, property lawyers, moving companies, expats communities and more in our pack for buying property in Saudi Arabia.
What properties?
As mentioned before, the average price per sqm in Riyadh is $1,730. A 1-bedroom property with 60 square meters of space would cost approximately $104,000, while a 2-bedroom with 85 square meters of space would cost approximately $147,000.
Obviously, property prices will change based on both the property itself and its location.
Prices tend to be higher in the top areas of Riyadh. An apartment in Kingdom City might cost around $200,000, while a residence in the Diplomatic Quarter could be about $390,000.
Certain locations are not as costly. You might encounter a condominium in Al Malaz for $60,000, or you could find a condominium in Al Aziziyah priced at $50,000.
We give a more detailed breakdown in our full pack for buying property in Saudi Arabia.
Risks and pitfalls
When buying a property in Saudi Arabia, there are a few unique risks to consider that are not common in other countries.
We have made a complete overview of the risks and how to avoid them in our Saudi Arabia Property Pack.
For a shorter version, you can check our article about the common mistakes foreigners make when buying property in KSA.
Here is also a summary table we've made for you.
| Mistake/Pitfall | Description | Prevention Tips |
|---|---|---|
| Not aligning prayer areas with the Qibla | Failing to ensure that prayer areas in the property face Makkah (Mecca) can lead to dissatisfaction and affect resale value. | Verify the Qibla direction, use Qibla compasses or apps, consult local religious authorities if needed. |
| Not understanding the Ijara contract | Misunderstanding the terms of an Ijara contract, a common financing method in Saudi Arabia, can lead to disputes and misunderstandings. | Fully understand payment structure, maintenance responsibilities, and conditions for property ownership transfer. |
| Buying land designated for sustainable resource management | Purchasing property within Hima zones without understanding the restrictions can lead to legal issues and unexpected responsibilities. | Research the property thoroughly, seek legal advice regarding Hima-designated land. |
| Not having your name on the title deed | Not being aware of the "tanazul" system can put foreign buyers at risk as the property's title deed remains under a Saudi national's name. | Be aware of the risks associated with tanazul arrangements, including limited legal recourse. |
| Not considering Vision 2030 developments | Failing to research future development plans in the area may lead to property issues, including expropriation and changes in the neighborhood's character. | Thoroughly research development plans, consult reliable real estate experts, and assess long-term impacts. |
| Not verifying the title deed properly | Inadequate investigation of the property's title deed, zoning regulations, and land use permissions can result in unexpected limitations and disputes. | Work with local real estate professionals familiar with Saudi Arabian property market and zoning regulations. |
| Not being familiar with the Hijri calendar | Lack of understanding of the Hijri calendar can lead to misunderstandings, miscalculations, and potential legal issues in property transactions. | Know which calendar is used in documents, convert and calculate dates accurately, especially for payment schedules and milestones. |
| Overlooking undocumented rights of way | Ignoring informal access rights on a property can lead to disputes with locals and restrictions on land use and development. | Conduct thorough due diligence, engage with local communities, consult legal experts, and understand cultural dynamics. |
| Buying property with fragmented ownership | Saudi Arabia's inheritance laws can result in complex, fragmented property ownership, making consolidation and purchase challenging. | Ensure clear and undisputed ownership before proceeding with a sale, resolve disputes among owners if necessary. |
We don't want this to happen to you, so we have included a full checklist for your property investment in our pack of documents. Avoid these mistakes and save a lot of money.
Everything you need to know is included in our Saudi Arabia Property Pack
Living in Riyadh
Living in Riyadh is a great opportunity to experience the modern amenities and cultural attractions of a thriving metropolis with the convenience of owning property in the heart of the city.
Cost of living
The cost of living in Riyadh is generally higher than in other cities due to the fact that it is the capital of Saudi Arabia. However, it is still relatively affordable compared to other major cities in the world.
Here are some examples to better understand the cost of living in Riyadh:
- Rent for a one-bedroom apartment in the city center: $600-$900 per month.
- Monthly utilities (electricity, water, heating): $100-$150 for a standard 85m² apartment.
- A meal at a mid-range restaurant: $15-$25 per person.
- Local transportation (bus, metro): $1-$2 per ride.
- Basic groceries for a week (milk, bread, eggs): $20-$30.
- Gasoline (1 liter): $0.50-$0.75.
- Fitness club membership: $50-$70 per month.
- Cinema ticket: $10-$15.
Neighbourhoods and spots
Since our aim is to make information easy to understand, we've crafted a summary table outlining the various neighborhoods in Riyadh. For yields, prices and rents, check our property pack.
| Neighborhood | Description | Strengths | Weaknesses |
|---|---|---|---|
Olaya |
Olaya is a bustling commercial district with skyscrapers, shopping malls, and a vibrant nightlife. |
Modern infrastructure, numerous entertainment options, and excellent dining choices. |
High traffic congestion, can be noisy and crowded. |
Al-Malaz |
Al-Malaz is a well-established residential area with parks, schools, and hospitals. |
Family-friendly, plenty of amenities, and a sense of community. |
Limited nightlife and entertainment options, older buildings. |
Diplomatic Quarter |
The Diplomatic Quarter houses various embassies, diplomatic missions, and spacious residential compounds. |
Secure and peaceful environment, well-maintained surroundings. |
Restricted access, limited public facilities. |
Al-Woroud |
Al-Woroud is a modern residential area with a mix of villas and apartments, offering a calm and suburban lifestyle. |
Quiet surroundings, good schools and medical facilities nearby. |
Less variety in shopping and dining options, limited public transportation. |
Al-Nakheel |
Al-Nakheel is an upscale neighborhood known for its luxury villas and upscale shopping centers. |
Exclusive and luxurious living, proximity to golf courses and parks. |
Expensive real estate, traffic congestion during peak hours. |
Murabba |
Murabba is a historic district with the King Abdulaziz Historical Center and several government buildings. |
Rich cultural heritage, historical landmarks, and green spaces. |
Limited modern amenities, less vibrant nightlife. |
Al-Ma'ather |
Al-Ma'ather is a primarily residential neighborhood with a mix of villas and apartments. |
Quiet and family-friendly atmosphere, several schools and parks. |
Some areas still under development, limited public transportation. |
Al-Olayya |
Al-Olayya is a vibrant district with a wide range of shops, restaurants, and cafes. |
Great shopping and dining options, lively atmosphere. |
High foot traffic, limited green spaces. |
Al-Muruj |
Al-Muruj is a fast-growing area with modern residential compounds and commercial centers. |
Newly developed, good infrastructure, and accessibility. |
Limited public transportation, ongoing construction in some parts. |
Al-Malga |
Al-Malga is a residential neighborhood with a mix of villas and apartments, providing a quiet living environment. |
Peaceful surroundings, schools, and supermarkets nearby. |
Limited public amenities, farther from the city center. |
Al-Rawdah |
Al-Rawdah is an upscale area with luxury villas and modern residential compounds. |
Exclusive living, close to international schools and shopping malls. |
High cost of living, traffic congestion during peak hours. |
Al-Sulimaniyah |
Al-Sulimaniyah is a lively district with a mix of residential and commercial properties. |
Wide range of restaurants, shops, and cafes, good public transportation. |
Noisy and crowded, limited green spaces. |
Al-Wadi |
Al-Wadi is a residential neighborhood with a tranquil atmosphere, known for its gardens and parks. |
Quiet living, green spaces, and proximity to schools and medical facilities. |
Less variety in shopping and entertainment options. |
Life in Riyadh
Riyadh is the capital of Saudi Arabia and is known for its strong economy. It is an important hub for finance, commerce, and banking, and is home to many large businesses and multinational corporations.
What expats usually like the most in Riyadh is the vibrant nightlife, with a wide variety of restaurants and bars, as well as the many shopping malls and luxury hotels. They also appreciate the city's modern infrastructure and transportation systems.
Regarding safety, the crime rate of Riyadh is around 26, which is a very impressive score. Riyadh's culture is based on strong religious values, which discourages crime and promotes respect for the law, resulting in almost no crime in the city.
A good point for a property investor - there is a metro system in Riyadh called the Riyadh Metro, which is currently under construction and scheduled to open in 2019.
Access to healthcare in Riyadh is very good, with a Healthcare Index of 65. Good healthcare facilities is great for real estate.
Finally, it is worth noting that Riyadh has three top-tier universities: the King Saud University, the Alfaisal University and the Imam Mohammad Ibn Saud Islamic University.
Don't lose money on your property in Riyadh
100% of people who have lost money in Saudi Arabia have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
Renting out in Riyadh
This section is for you if you're interested in purchasing property not for personal residence, but rather for the purpose of renting it out to generate rental income.
Long-term
Tenant Profiles in Riyadh
According to the data reported by Wikipedia, the home ownership rate in Saudi Arabia is 62%, which is not much.
It means that, if you decide to buy and rent out in Riyadh, there will be a lot of people who can become your potential tenants.
If you decide to buy and rent out to long-term tenants, you should target young professionals, families, and expats in Riyadh. For short-term tenants, you should target business travelers, tourists, and students.
Here is a little summary table we've made for you.
| Property type and area | Profiles of potential tenants | What they are looking for | Expected monthly rent in $ |
|---|---|---|---|
Apartment in Al Olaya |
Professionals, expats |
Central location, convenience |
$500 - $1,200 |
Villa in Al Hamra |
Families, executives |
Spacious living, upscale amenities |
$1,500 - $3,000 |
Studio in Al Malaz |
Students, young professionals |
Central location, budget-friendly |
$300 - $700 |
Compound in Al Yasmin |
Expats, families |
Secure community, family-friendly |
$1,000 - $2,500 |
2-Bedroom Apartment in Al Mursalat |
Young professionals, couples |
Convenient location, modern living |
$400 - $900 |
High-rise Apartment in Al Waha |
Urban dwellers, families |
Modern amenities, accessibility |
$500 - $1,000 |
1-Bedroom Apartment in Al Moroj |
Singles, young professionals |
City living, affordability |
$300 - $600 |
Rental yields
These days, Riyadh presents attractive opportunities in terms of rental yields. In fact, you can easily achieve yields above 9% due to the relatively low cost of living and property prices in Riyadh compared to other cities in the region.
The best rental yields in Riyadh are typically found in properties located in the city center and close to major transportation links, as these areas have a high demand for rental accommodation. Additionally, properties located in more affluent neighborhoods tend to have higher rental yields due to higher rental prices.
For further explanation and a more detailed breakdown, you can check the reports and analyses we have made.
Short-term
You could also decide to rent short-term to business travelers, students, and long-term residents who are looking for a temporary place to stay in Riyadh. Additionally, tourists or people visiting family are also potential tenants for short-term rentals in Riyadh.
If you decide to go with that option, look for properties in Al Malaz and Al Olaya, as these neighborhoods are popular amongst short-term tenants. Additionally, properties in the Diplomatic Quarter are well-suited for short-term rentals.
Currently, there are approximately 6,000 active Airbnb listings in Riyadh, reflecting a highly dynamic and bustling short-term rental market. The average daily rate stands around $121.
You have the opportunity to generate a nice additional income stream then. According to online testimonials and analytics platform like AirDNA, Guesty and Inside Airbnb, people who offer short-term rentals in Riyadh can make around $800 per month. Also, the average occupancy rate is estimated at 23%.
Is it worth buying real estate in Riyadh then?
Buying property in Riyadh can be a smart move if you're in it for the long haul. The city offers attractive financial prospects with a low property price-to-rent ratio, meaning you can recover your investment relatively quickly through rental income.
Riyadh's economic stability and projected growth signal potential for property appreciation. Rental yields can soar above 9%, making it a promising option for generating income. The city's low crime rate and adherence to cultural values enhance safety and property values.
However, if you're planning a short stay or unfamiliar with Riyadh's real estate intricacies, buying property might not be the best choice. The city's property market can be complex, requiring local expertise. Prices vary significantly between neighborhoods, so align your choice with your budget and preferences.
Unique risks like prayer area orientation, Ijara contracts, and Vision 2030 developments must be understood and managed. Short-term rentals can be profitable but require diligent management.
In the end, consider your goals, seek local guidance, and conduct thorough research to decide whether buying property in Riyadh is the right move for you.
Make sure you understand the real estate market in Riyadh
Don't rush into buying the wrong property in Saudi Arabia. Sit, relax and read our guide to avoid costly mistakes and make the best investment possible.
The content provided here is for informational purposes only and does not imply endorsement or advice. While we strive for accuracy, we do not guarantee the completeness or reliability of the information, including text, images, links, or other elements in this material. Following the content and analyses presented here does not assure specific outcomes. For guidance tailored to your individual circumstances, it is recommended to consult with a professional, such as a lawyer, accountant, or business advisor.