The real estate sector in Saudi Arabia has seen robust activity and growth throughout the early months of 2024, with transactions exceeding 280,000 and amounting to over SAR636 billion ($169.5 billion). This surge underscores the sector’s substantial contribution to the country’s GDP, now standing at 5.9 percent, highlighting its pivotal role in the Saudi economy.
During the week ending June 22, 2024, the Saudi real estate stock exchange was particularly active, witnessing 518 transactions valued at $88 million. These deals spanned approximately 900,000 square meters of real estate, with prices ranging up to $4,000 per square metre and an average price of $99 per square metre.
Notably, the Al-Wisam area in Jeddah emerged as the most traded neighbourhood during this period. It was followed by the Arid district and the Al-Rimal neighbourhood in Riyadh. Jawharat Al-Arous in Jeddah and the northwestern Al-Bukayriyah district also featured prominently in the list of top trading areas.
Experts attribute the high transaction volume in the real estate sector to investor confidence, driven by perceived stability amidst volatility in other markets such as stocks and commodities, as well as fluctuating interest rates. The sector’s resilience and growth are further bolstered by substantial government investments in flagship projects like Qiddiya, NEOM, and the Red Sea development.
The Saudi real estate market’s performance reflects sustained demand and substantial growth, indicating a stable economic environment conducive to long-term investments. This stability has been reinforced by the government’s commitment to economic reforms under Vision 2030, aimed at diversifying the economy and reducing dependence on oil revenues.
The economic importance of the real estate sector in Saudi Arabia cannot be overstated. It serves as a fundamental pillar of the economy, attracting significant investments and fostering large-scale development projects. Government initiatives aimed at streamlining regulations and promoting investment have further enhanced the sector’s attractiveness, resulting in job creation and the development of new skills within the real estate industry.
Several factors have contributed to the continued growth and sustainability of the Saudi real estate market. Economic reforms and investment policies have improved the business environment, making it easier to conduct transactions and attract capital. Mega projects across the Kingdom have played a pivotal role in drawing investments, while increasing urbanization has fueled demand for housing and related services.
Political and economic stability in Saudi Arabia has been instrumental in fostering investor confidence and encouraging long-term commitments in the real estate sector. These factors combined have created a fertile ground for sustained growth, benefiting both the economy and the population at large.
Looking ahead, experts anticipate that the Saudi real estate sector will continue to thrive, supported by ongoing government reforms, large-scale projects, and sustained investor interest. As the Kingdom progresses towards achieving its Vision 2030 goals, the real estate sector is expected to play an increasingly vital role in driving economic diversification, job creation, and sustainable development.