With rising demand and Vision 2030 investments, Saudi real estate prices are projected to push the market to $101.62 billion by 2029

Saudi Arabia’s real estate market continues its upward trend, as the Real Estate Price Index rose by 2.6% year-on-year in the third quarter of 2024. According to the General Authority for Statistics (GASTAT), this growth is primarily driven by increased prices in residential, commercial, and agricultural real estate sectors, underpinned by the Kingdom’s Vision 2030 goals to establish Saudi Arabia as a global business and tourism hub.

The residential sector saw prices increase by 1.6% year-on-year, with the cost of residential land plots—a major component of the index—also rising by 1.6%. The commercial sector experienced even greater growth, as property expenses climbed 6.4% year-on-year, and commercial land plots specifically increased by 6.3%. Agricultural real estate also saw a notable increase of 8.7%, reflecting a broad strengthening across various property segments in the Kingdom.

GASTAT’s data highlighted that within the residential market, apartment prices increased by 1.9%, while villas rose by 1.5%. However, residential floors experienced a slight decline of 1.8%, indicating some variation in demand within residential categories. In the commercial sector, building prices climbed by 8.6%, while galleries and shops faced a slight decrease of 1.1%, illustrating shifting demand dynamics.

Regionally, Riyadh recorded the highest real estate price growth with a 10.2% increase, followed by Hail and the Northern region at 5% and 1.7%, respectively. Meanwhile, Makkah and the Eastern Province faced declines of 1.3% and 8.3%, possibly due to regional economic factors and variations in demand.

These developments reflect Saudi Arabia’s drive to diversify its economy and build a robust real estate market, with the Real Estate General Authority projecting the market’s value to reach $69.51 billion in 2024 and $101.62 billion by 2029, growing at an annual rate of 8%. Knight Frank also reported a 25% increase in residential transaction values year-on-year, totalling SR35.4 billion, with a corresponding 12% rise in transaction volume, showcasing robust demand in housing.

In the commercial space, JLL reported that Grade A office rents in Riyadh surged to SR2,090 per square metre by mid-2024. The demand for premium office space is supported by the influx of new developments, with 52,000 square metres added in the first half of the year and further expansions anticipated in Riyadh and Jeddah in the second half.

As Vision 2030 projects reshape the Kingdom’s real estate landscape, the market remains poised for sustained growth. Driven by a rising expatriate and local population, Saudi Arabia’s real estate expansion reflects its commitment to creating vibrant urban centres and attracting investment to the region.