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Saudi Arabia's property market is experiencing a significant transformation driven by Vision 2030 initiatives and increasing foreign investment opportunities.
The residential sector shows strong growth potential with prices rising 4.3% year-on-year in Q1 2025, while major infrastructure projects worth over USD 500 billion are reshaping the landscape. Current market conditions indicate sustained demand exceeding supply, creating favorable conditions for both investors and residents looking to enter the market.If you want to go deeper, you can check our pack of documents related to the real estate market in Saudi Arabia, based on reliable facts and data, not opinions or rumors.
Saudi Arabia's residential property market shows robust growth with prices averaging SAR 4,200-5,824 per square meter and annual growth forecasted at 7% through 2033.
Vision 2030 is driving massive infrastructure investments exceeding USD 500 billion, while the government targets 70% homeownership by 2030, up from current 62% levels.
| Market Metric | Current Status (2025) | Forecast/Target |
|---|---|---|
| Average Price per sqm | SAR 4,200 - 5,824 | 7% annual growth to 2033 |
| Annual Housing Delivery | 40,000 units | 124,000 units needed annually |
| Homeownership Rate | 62% | 70% by 2030 |
| Major Projects Value | USD 500+ billion | NEOM, Qiddiya, Red Sea Project |
| Foreign Investment | Growing momentum | USD 130+ billion by 2033 |
| Population Growth | Current population base | 40+ million by 2030 |
| Rental Yields | 5-7% in major cities | Higher than 5 years ago |
What's the current average price per square meter for residential properties in Saudi Arabia?
The average price per square meter for residential properties in Saudi Arabia currently ranges between SAR 4,200 and SAR 5,824 as of September 2025.
Riyadh leads the market with the highest property prices, averaging SAR 4,971 per square meter for apartments and SAR 5,824 per square meter for villas. Other major cities like Jeddah and Dammam show slightly lower but competitive pricing structures within the national range.
Compared to last year, Saudi Arabia's residential property market has experienced a 4.3% year-on-year price increase in Q1 2025. This growth reflects strong demand driven by Vision 2030 initiatives and improved mortgage accessibility for Saudi nationals. However, some regions have actually seen price corrections due to increased housing supply and government market balancing efforts.
The price variations across different property types and locations demonstrate a maturing market where premium areas command significant premiums over standard residential developments.
It's something we develop in our Saudi Arabia property pack.
How many new housing units are expected to be delivered in the next 12 months?
Saudi Arabia is set to deliver over 40,000 new housing units nationwide in the next 12 months through 24 major residential projects linked to Vision 2030.
This delivery rate is part of an ambitious government housing program designed to meet growing population needs and achieve the 70% homeownership target by 2030. The projects span across major cities including Riyadh, Jeddah, Dammam, and emerging urban centers.
However, current delivery still falls short of actual demand requirements. Market analysts estimate that Saudi Arabia needs an average of 124,000 to 150,000 additional housing units annually through 2030 to accommodate population growth and changing household sizes. This means the current delivery pace covers only about 30% of the actual housing demand.
The supply-demand gap indicates continued upward pressure on property prices and rental rates, creating opportunities for property investors while highlighting the ongoing housing shortage challenge.
What is the forecasted annual growth rate of property prices over the next three years?
Leading market analysts forecast an annual compound growth rate (CAGR) of approximately 7% for Saudi Arabian residential property prices from 2025 through 2033.
This robust growth projection is primarily attributed to Vision 2030 infrastructure investments, mega-project developments like NEOM and Qiddiya, and sustained demand from both domestic and international investors. The growth rate reflects one of the strongest property market performances in the MENA region.
Several factors support this optimistic forecast including government housing initiatives, improved mortgage lending conditions, population growth exceeding 2% annually, and substantial foreign investment inflows expected through the decade. The construction of new cities and economic zones is creating additional demand drivers.
Regional variations within this growth rate are expected, with Riyadh and emerging development zones potentially outperforming the national average, while established markets may show more moderate appreciation.
How much has mortgage lending increased in Saudi Arabia in the past 12 months?
Saudi Arabia has seen a significant 7% year-on-year increase in residential property transactions, driven primarily by expanded mortgage lending activity and government housing support schemes.
The growth in mortgage activity is supported by improved lending conditions, government-backed financing programs, and reduced down payment requirements for Saudi nationals. Banks have become more competitive in their mortgage offerings, with some institutions offering rates as low as 3-4% for qualified borrowers.
Government initiatives including the Ministry of Housing's various programs have made homeownership more accessible through subsidized lending and shared equity schemes. The Saudi Real Estate Development Fund (REDF) continues to provide low-cost financing options for first-time homebuyers.
While specific loan volume and borrower number data for the last 12 months are not yet publicly available from banking authorities, the transaction volume increase indicates substantial growth in mortgage origination.
What percentage of Saudi households are currently homeowners?
Approximately 62% of Saudi households currently own their homes as of 2025, representing steady progress toward the government's Vision 2030 homeownership targets.
The Saudi government has set an ambitious target of achieving 70% homeownership by 2030, requiring an 8 percentage point increase over the next five years. This goal is being pursued through various housing programs, subsidized lending, and new residential project developments.
Current homeownership rates vary significantly by region and demographic, with urban areas like Riyadh and Jeddah showing lower ownership rates due to higher property prices and larger rental markets. Rural and smaller city areas typically demonstrate higher homeownership percentages.
The projected increase to 70% by 2030 appears achievable given the current pace of government housing programs and the delivery of new affordable housing units across the kingdom.
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How many major real estate projects are under construction and what's their total estimated value?
Saudi Arabia currently has multiple major real estate projects under construction with a combined estimated value exceeding USD 500 billion, representing one of the world's largest real estate development programs.
The flagship projects include NEOM (USD 175+ billion), a futuristic city in the northwest; Qiddiya (USD 58+ billion), an entertainment and sports mega-project near Riyadh; and The Red Sea Project (USD 28+ billion), a luxury tourism destination on the western coast.
Additional significant developments include the New Murabba district in Riyadh, Amaala luxury tourism project, King Salman Park, and various components of the Saudi Green Initiative. These projects collectively span residential, commercial, tourism, and mixed-use developments.
These mega-projects are central to Vision 2030's economic diversification goals and are expected to create millions of jobs, attract international investment, and reshape Saudi Arabia's urban landscape over the next decade.
It's something we develop in our Saudi Arabia property pack.
What is the expected impact of Vision 2030 on foreign investment inflows?
Vision 2030 is projected to attract over USD 130 billion in new real estate investment by 2033, with foreign capital playing an increasingly significant role in the market.
The program's liberalization reforms, including new property ownership laws effective January 2026, tax incentives, and reduced bureaucratic barriers, are making the Saudi real estate market more accessible to international investors. These changes represent a fundamental shift in the kingdom's approach to foreign investment.
Market analysts expect foreign investment to accelerate significantly following the implementation of new ownership regulations, which will allow non-Saudi nationals to purchase property in designated areas without requiring local sponsorship or partnership structures.
The combination of mega-project developments, economic diversification initiatives, and regulatory reforms is positioning Saudi Arabia as a major destination for international real estate capital in the MENA region.
How much office space is expected to come online in major cities?
Significant new office space is planned for delivery in Riyadh, Jeddah, and Dammam through 2025-2026, though specific square footage data for these deliveries is not yet published in official market reports.
Riyadh is experiencing the largest commercial development boom with new business districts including the New Murabba project and King Abdullah Financial District expansions. Jeddah's office market is benefiting from Red Sea Project developments and port expansion activities.
Current office vacancy rates in major Saudi cities vary by location and building class, but market conditions generally favor landlords due to limited high-quality office inventory relative to demand from expanding businesses and government entities.
The Vision 2030 program is driving demand for modern office space as international companies establish regional headquarters and local businesses expand operations across the kingdom.
What is the average rental yield for residential properties in major cities?
| City | Property Type | Average Rental Yield |
|---|---|---|
| Riyadh | Apartments | 5-6% |
| Riyadh | Villas | 6-7% |
| Jeddah | Apartments | 5-7% |
| Jeddah | Villas | 6-8% |
| Dammam | Apartments | 6-7% |
| Dammam | Villas | 7-8% |
| Premium Segments | All Types | 7%+ |
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Saudi Arabia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How many international real estate investors entered the Saudi market last year?
While precise investor numbers are not publicly available, market research indicates strong international interest with nearly 84% of high-net-worth Muslim international investors expressing desire to enter the Saudi real estate market.
International investor participation is currently limited by existing ownership restrictions, but significant momentum is building ahead of the new property ownership laws taking effect in January 2026. Early investors are positioning themselves through joint ventures and partnership structures.
The percentage of total property transactions involving foreign buyers remains relatively small under current regulations, but this is expected to increase dramatically once direct foreign ownership becomes legal in designated areas.
Regional investors from GCC countries, alongside institutional investors from Asia and Europe, represent the primary sources of international capital interest in Saudi real estate markets.
It's something we develop in our Saudi Arabia property pack.
What is the forecasted population growth and housing requirement by 2030?
Saudi Arabia's population is forecasted to exceed 40 million by 2030, up from approximately 35 million currently, representing sustained growth of over 2% annually.
This population expansion will require an estimated 1.2 million additional housing units by 2030 to accommodate new residents and changing household demographics. The housing requirement includes both ownership and rental properties across all income segments.
Rapid urbanization trends are concentrating population growth in major cities, with Riyadh and Jeddah expected to absorb the largest share of new residents. Smaller household sizes and younger demographics are also influencing housing demand patterns.
The government's housing programs are designed to meet this demand while achieving the 70% homeownership target, requiring coordinated efforts across public and private sectors to deliver sufficient housing inventory.
How much is the construction cost inflation rate and what impact will it have on property prices?
Construction cost inflation in Saudi Arabia remains elevated due to material price increases and labor cost pressures, though specific inflation rates are not detailed in current official reports.
Rising construction costs are driven by global commodity price volatility, increased steel and cement costs, and competition for skilled construction workers across multiple mega-projects. These factors are creating upward pressure on development costs.
The impact on property prices over the next two years is expected to be positive for existing property values, as new construction becomes more expensive and supply constraints persist. Developers are passing increased costs to buyers through higher selling prices.
This cost inflation dynamic supports the 7% annual price growth forecast, as replacement costs for new housing continue to rise faster than general inflation rates in the kingdom.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Saudi Arabia's property market forecast shows strong fundamentals with Vision 2030 driving unprecedented infrastructure investment and economic diversification.
The combination of population growth, housing supply constraints, and foreign investment liberalization creates favorable conditions for both property investors and residents considering relocation to the kingdom.
Sources
- Average House Price Saudi Arabia
- Middle East Briefing - Saudi Arabia New Property Law
- Asharq Al-Awsat - Saudi Real Estate Market
- Gulf News - Saudi Arabia Home Sales Boom
- Arab News - Business Economy
- US-Saudi Business Council Housing Report
- Economy Middle East - Housing Units Delivery
- IMARC Group - Saudi Arabia Real Estate Market