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5 Most Affordable Cities to Live in Saudi Arabia



Exploring Affordable Living in Saudi Arabia

The affordability of cities in Saudi Arabia is largely determined by housing costs, food prices, transportation expenses, and utilities. Major cities like Riyadh and Jeddah tend to have higher living costs due to increased demand for housing and a wider range of dining options1. Conversely, smaller cities like Hail and Abha offer a more affordable lifestyle with lower living expenses2.

Living in an affordable city provides several advantages. Lower living costs allow for more disposable income, contributing to financial stability and the potential for increased savings or investments. Moreover, these cities often have a slower pace of life, contributing to a better work-life balance and improved mental health.

Affordable cities also offer unique cultural experiences. For instance, Abha is known for its cool climate, beautiful landscapes, and cultural festivals. However, it’s crucial to consider individual preferences and job opportunities when choosing a city to reside in.

Understanding the Cost of Living in Saudi Arabia

The cost of living in Saudi Arabia is shaped by several factors, including housing, transportation, and lifestyle choices. Housing costs, particularly in major cities like Riyadh and Jeddah, can be substantial, with a one-bedroom apartment in the city centre ranging from SAR 1,500 to SAR 3,000 per month3. However, smaller cities and towns offer more affordable housing options.

Transportation costs, while lower due to the country’s abundant oil reserves, can rise with the expenses of car ownership, a common necessity due to limited public transportation. Lifestyle costs, such as dining out and entertainment, can also add up, especially in larger cities. Yet, the cost of groceries and household goods is generally lower compared to many Western countries, thanks to government subsidies.

When compared globally, Saudi Arabia’s cost of living is lower than many Western countries but higher than some Asian countries. A significant advantage is the absence of income tax, which can significantly reduce overall living expenses. As economist Dr. Ahmed Al-Khateeb notes, “The average cost of living in Saudi Arabia varies depending on the individual’s lifestyle, but it is generally lower compared to Western countries.”4

The Economic Hub with Affordable Living

Riyadh, the capital city of Saudi Arabia, offers a relatively affordable cost of living compared to many global major cities5. The city’s thriving job market, with opportunities in sectors such as finance, healthcare, and IT, attracts both local and expatriate professionals. The competitive salaries and tax-free income policy enhance residents’ purchasing power, contributing to the city’s overall affordability.

Housing in Riyadh caters to diverse income groups, offering a mix of luxury villas and budget-friendly apartments. While housing costs may be slightly higher compared to other Saudi cities, the higher average salaries in Riyadh often offset this difference. The government’s “Sakani” programme further eases the burden of housing costs, providing affordable housing solutions6.

Transportation in Riyadh is also cost-effective, thanks to an extensive road network, a well-developed public transportation system, and globally low fuel prices. The recent launch of the Riyadh Metro and other government initiatives have made commuting more convenient and affordable.

In comparison to the overall cost of living in Saudi Arabia, Riyadh offers a balanced lifestyle with affordable living costs, diverse job opportunities, and a comfortable lifestyle. The lower transportation costs and the availability of various amenities and services further contribute to Riyadh’s affordability.

The Cultural Hub with Reasonable Costs

Jeddah, often referred to as the cultural hub of Saudi Arabia, offers a cost of living that is generally more affordable than Riyadh7. This affordability is largely attributed to diverse job opportunities, particularly in sectors such as tourism, trade, and logistics. The city’s strategic location as a port city further bolsters its economy, attracting a wide array of local and expatriate workers.

Housing in Jeddah is notably more cost-effective, with rental prices approximately 10% lower than in Riyadh. For instance, the average rent for a one-bedroom apartment in the city centre of Jeddah ranges between SAR 1,500-2,500 per month, while in Riyadh, it’s typically between SAR 2,000-3,5008.

In terms of transportation, Jeddah offers a more affordable and varied public transportation system, including buses and a developing metro system. This contrasts with Riyadh’s more comprehensive but higher-cost transportation system. These factors combined make Jeddah an attractive choice for those seeking a balance between cultural richness, affordability, and quality of life.

The Industrial Hub with Low Living Costs

Dammam, the capital of Saudi Arabia’s Eastern Province, stands out as an industrial hub with a significantly lower cost of living compared to Jeddah and Riyadh9. The city’s robust job market, particularly in the oil and gas industry, contributes to its affordability. As Dr. Ahmed Al-Sulaiman, an economist, points out, “The presence of Saudi Aramco, the world’s most profitable company, has significantly boosted Dammam’s local economy, creating a wealth of employment opportunities.”10

Housing in Dammam is more affordable, with a variety of options available to cater to different budgets. In terms of transportation, Dammam offers efficient public transportation options such as buses and taxis, which, combined with lower fuel prices, contribute to lower commuting expenses. While Jeddah and Riyadh have more extensive transportation networks, the overall cost of living in Dammam remains lower, making it an attractive option for many individuals.

A Blend of Affordability and Quality of Life

In the Eastern Province of Saudi Arabia lies Al Khobar, a city that presents a harmonious blend of affordability and quality of life. The cost of living here is notably lower than in larger cities such as Riyadh and Jeddah11, largely due to the wealth of job opportunities, particularly in the oil and gas sector. The presence of Saudi Aramco, the world’s most profitable company, provides high-paying jobs, contributing to the city’s economic stability and affordability.

The housing market in Al Khobar is diverse, offering everything from budget-friendly apartments to luxurious villas. Although housing costs are slightly higher than in the neighbouring city of Dammam, they remain more affordable than in Jeddah and Riyadh12.

Transportation in Al Khobar is both efficient and reasonably priced. The city boasts a well-developed public transportation system, and the cost of owning a car is lower than in larger cities. This, combined with the city’s strategic location near the King Fahd Causeway, a hub for trade and commerce, further enhances Al Khobar’s appeal as a cost-effective place to live and work.

Factors to Consider When Choosing an Affordable City

When choosing an affordable city to live in Saudi Arabia, key factors to consider include cost of living, housing affordability, job opportunities, and quality of life. Each city, be it Riyadh, Jeddah, Dammam, or Al Khobar, has unique characteristics affecting these factors13.

Riyadh, for instance, has a lower cost of living index compared to the other cities, but higher housing prices. Housing in Jeddah is more affordable, with costs per square metre significantly lower than in Riyadh. Dammam and Al Khobar, hubs of the oil industry, offer lucrative job opportunities often accompanied by housing allowances, but have higher living costs14.

Quality of life, encompassing safety, education, healthcare facilities, recreational activities, and cultural amenities, is another crucial factor. Riyadh and Jeddah generally score higher in this regard. Understanding these factors can help individuals make informed decisions about relocation, balancing their financial capabilities with their lifestyle preferences and job prospects.

Benefits of Living in an Affordable City in Saudi Arabia

Living in an affordable city in Saudi Arabia offers a multitude of benefits, significantly enhancing the quality of life for residents. Financially, lower living costs, including affordable housing, groceries, transportation, and utilities, provide more disposable income, fostering financial stability and growth. According to the Saudi Arabian General Authority for Statistics, the average monthly rent in affordable cities is almost 50% lower than in larger cities15.

Aside from financial advantages, affordable cities offer a strong sense of community and social engagement. As urban planning expert Jane Jacobs notes, “Cities have the capability of providing something for everybody, only because, and only when, they are created by everybody.

Moreover, these cities balance cultural and natural attractions, contributing to a fulfilling lifestyle. Residents can explore rich heritage sites, participate in cultural events, and enjoy outdoor activities.

While they may not offer the same level of amenities or job opportunities as larger cities, the financial benefits, strong community, and cultural opportunities make affordable cities a compelling choice. As economist Thomas Sowell emphasises, the cost of living plays a crucial role in wealth accumulation, making affordable cities an attractive option16.

Real Estate Ownership and Investment for NonSaudis

The liberalisation of real estate ownership and investment laws in Saudi Arabia has significantly impacted the cost of living for non-Saudis, particularly in major cities like Riyadh, Jeddah, and Dammam17. These reforms have allowed non-Saudis to own property in designated areas, albeit with restrictions in holy cities like Mecca and Medina. The increased demand for properties has led to a surge in property prices and rental costs. For instance, John, a British expat in Riyadh, has experienced a rent increase of nearly 20% in the past two years.

Non-Saudis may also face challenges in securing financing for property purchases due to stringent lending criteria by local banks. However, these laws also present investment opportunities in the steadily growing Saudi real estate market18. Non-Saudis considering living or investing in Saudi Arabia should navigate the complexities of the real estate market, understand the legal requirements, and prepare for the financial implications of property ownership. These laws are part of Saudi Arabia’s Vision 2030 initiative, aimed at attracting foreign investment and diversifying the economy.

licencing and Investment Requirements for NonSaudis

Non-Saudis seeking to invest in Saudi Arabian real estate must navigate specific licencing requirements, set by the Saudi Arabian General Investment Authority (SAGIA)19. These stipulations, part of the “Real Estate Ownership and Investment for Non-Saudis” section, require non-Saudis to obtain a foreign investor licence, have a valid residence permit, a clean legal record, and a Saudi bank account for transactions.

However, these requirements can impact city affordability for non-Saudis. The high minimum investment value, typically SAR 30 million (~$8 million), can be a significant barrier for smaller investors. Additionally, the licencing process can be costly and time-consuming, adding to the overall investment.

Despite these challenges, Saudi Arabia issued 1,131 new foreign investment licences in 2019, a 54% increase from the previous year20, indicating growing non-Saudi interest in the Saudi real estate market. However, the impact of these changes on city affordability for non-Saudis is yet to be fully realised.

Acquiring Real Estate for Private Residence by NonSaudis

Non-Saudis seeking to acquire real estate for private residence in Saudi Arabia must adhere to specific regulations21. These include possessing a valid residence permit and demonstrating financial solvency. The property must be for personal use and not exceed 10,000 square metres. These requirements align with the licencing and investment regulations for non-Saudis, ensuring foreign investors contribute positively to the Saudi economy and safeguard national security.

However, these regulations can impact the cost of living for non-Saudis in cities like Riyadh and Jeddah. The need to demonstrate financial solvency can increase living costs, as individuals must maintain a certain level of income. Additionally, the restriction on property size can affect housing costs, particularly in cities with high property prices.

Economist Dr. Faisal Alsuwaidan emphasises that the cost of acquiring a licence and the limited locations available for purchase can increase the overall cost of living for non-Saudis22. These factors may deter some foreign individuals from living and investing in Saudi Arabia.

Making Saudi Arabia Your Affordable Home

The affordability of Saudi Arabian cities such as Hail, Abha, and Najran offers a cost-effective lifestyle, making them attractive options for potential residents. These cities not only provide lower costs for housing, groceries, and transportation compared to pricier cities like Riyadh and Jeddah, but also offer unique advantages. For instance, Abha’s pleasant weather and beautiful landscapes make it an ideal choice for nature enthusiasts, while Najran’s rapidly developing economy provides ample job opportunities.

This information can guide decision-making by helping individuals align their financial capabilities and lifestyle preferences with the city’s cost of living. By accurately budgeting for essential expenses and understanding the salary needed to maintain a comfortable lifestyle, individuals can plan an effective move.

The increasing expatriate population in these cities indicates a welcoming and diverse community, offering opportunities for cultural exchange and social integration. Thus, the affordability of these cities not only impacts an individual’s immediate financial situation but also influences their overall quality of life, making Saudi Arabia an attractive and affordable home.

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