Vision 2030 targets homeownership growth, fueling increased activity in the Saudi residential property market

Saudi Arabia’s residential property market saw a significant boost in Q3 2024, with transaction values soaring by 25% year-on-year, reaching SR35.4 billion ($9.4 billion). This strong growth reflects rising demand in the housing sector, according to a report released by global real estate consultancy Knight Frank.

The number of residential deals also saw a notable 12% rise compared to the same quarter in 2023, totalling 45,924 transactions. Riyadh, the nation’s capital, led the way with a 16% jump in sales volumes and a striking 41% increase in transaction values, further cementing its status as a key player in the Kingdom’s real estate market.

This growth is closely aligned with Saudi Arabia’s ambitious Vision 2030, which aims to raise homeownership rates to 70% by 2030, driving extensive residential development projects. Much of this progress is supported by ROSHN, a flagship initiative backed by the Public Investment Fund (PIF), which aims to deliver over 200,000 new homes across the country.

Knight Frank’s report underscores the importance of Riyadh’s real estate expansion as part of the broader national push for urban development. “With a current supply of 3.5 million units across the Kingdom’s five major cities, we forecast the residential supply to reach nearly 3.7 million units by the end of 2026,” Knight Frank stated. This growth projection reflects the Kingdom’s efforts to accommodate a rising population and support economic diversification.

The housing boom is further evidenced by strong mortgage lending activity. During the first eight months of 2024, Saudi banks issued SR55.7 billion in residential mortgage loans, a 3% increase from the previous year. This consistent rise in mortgage lending highlights robust demand for homeownership, particularly as Saudi Arabia continues to attract both local and expatriate buyers.

The Kingdom’s housing market has been on a steady upward trajectory in recent years, supported by government reforms aimed at enhancing homeownership opportunities for Saudi citizens. The demand for real estate has been fuelled by a growing population and Saudi Arabia’s broader efforts to diversify its economy through initiatives that encourage investment and modern urban development.

A separate report by Jones Lang LaSalle in September highlighted similar trends, noting that mortgage contracts reached 24,482 in Q2 2024, a 12% increase compared to the previous year. The total value of these contracts amounted to SR18 billion, reflecting an 8% year-on-year rise. The sustained demand for residential properties, coupled with growing mortgage activity, aligns with the government’s strategic goals of expanding homeownership and bolstering the real estate market.

As the Kingdom continues to invest in its housing and infrastructure, the surge in residential transactions demonstrates the success of Vision 2030’s initiatives. These efforts have not only spurred growth in the real estate market but also created a conducive environment for both citizens and investors to participate in Saudi Arabia’s burgeoning housing sector.