Riyadh housing market growth reaches 51.6% as Vision 2030 fuels real estate expansion

The residential property market in Riyadh is experiencing a significant boom, with transactions soaring by an impressive 51.6% by the end of the second quarter of 2024, according to a report by CBRE. The Saudi capital recorded 18,500 sales valued at SR26.6 billion ($7.08 billion) during this period, marking a strong upward trend that reflects the broader strength of the Kingdom’s housing market. This surge is largely driven by population growth and strategic government-backed investment projects aimed at transforming Saudi Arabia’s housing sector.

This growth is not confined to Riyadh alone. Other key cities across the Kingdom, including Jeddah and the Dammam Metropolitan Area, have also experienced notable increases in residential transactions. Jeddah saw a 43.2% year-on-year rise with 9,392 sales, while the Dammam Metropolitan Area posted a 22.4% increase, bringing the total to 2,390 sales worth SR2.4 billion. The entire sector is clearly on an upward trajectory, positioning real estate as a core pillar of Saudi Arabia’s economic diversification strategy under the ambitious Vision 2030 initiative.

Vision 2030 and the Sakani Programme Drive Growth

One of the driving forces behind this boom is Saudi Arabia’s Vision 2030, a transformative initiative designed to modernise the Kingdom and diversify its economy beyond oil. A major component of Vision 2030 is the goal to increase homeownership to 70% by the end of the decade. To support families in achieving this, the Saudi government has launched the Sakani programme, offering personalised housing and financing solutions. This initiative has proven vital in unlocking homeownership opportunities for citizens across the country.

Matthew Green, Head of Research for the Middle East and North Africa at CBRE, commented on the remarkable rise in transactions, noting that Saudi Arabia’s residential sector remains robust, with sustained rental growth and continued high demand in key markets. “Riyadh, in particular, is showing signs of an undersupplied market,” said Green. “Employment and population growth, spurred by government investment projects, are driving significant housing demand that supply simply cannot keep pace with, particularly in certain high-demand areas of the market.”

Riyadh’s Rental and Property Prices on the Rise

In addition to soaring sales transactions, Riyadh’s rental market is also witnessing significant activity. In the first half of 2024, total residential rental transactions rose by 6.1%, reaching 274,146. Meanwhile, Jeddah’s rental market saw a slight 2.3% decline year-on-year, totalling 183,894 transactions.

Property prices in Riyadh are climbing steadily as well. Average apartment prices in the capital have risen by 11.7% annually since the third quarter of 2020, reaching SR5,000 per square metre by the end of June 2024. Villa prices, too, are experiencing strong growth. After a brief dip in early 2020 and 2021, villa prices have surged, reaching an average of SR5,824 per square metre in mid-2024, reflecting a year-on-year increase of 3.3%.

In Jeddah, property prices have followed a similar trend, though with more moderate fluctuations. Average apartment prices dipped slightly by 0.9% in the second quarter of 2024, now sitting at SR3,945 per square metre. Villa prices, however, have continued to rise, with a compound annual growth rate of 4.4% since 2020, pushing values to SR5,707 per square metre.

High-End and Affordable Neighbourhoods in Riyadh and Jeddah

The report highlights the diversity of property prices across Riyadh’s neighbourhoods, with some districts commanding premium rates. In areas like Hittin and Al-Malqa, villa prices range from SR9,500 to SR13,500 per square metre, making these neighbourhoods some of the most expensive in the capital. Similarly, the Al-Malqa district has seen prices between SR8,000 and SR12,900 per square metre.

On the other end of the spectrum, more affordable options are available in districts like As-Suwaidi and Al Aziziyah, where villa prices range from SR2,150 to SR4,800 per square metre in As-Suwaidi and SR2,200 to SR4,050 per square metre in Al Aziziyah.

Popular districts for apartment buyers include As-Sulimaniyah, where prices range from SR6,600 to SR10,500 per square metre, and An Nakheel, where prices sit between SR7,200 and SR10,300 per square metre. For those seeking more budget-friendly options, districts such as Dar Al-Baida and Al Aziziyah offer apartment prices as low as SR1,900 per square metre, rising to around SR4,200 per square metre.

Jeddah, too, offers a wide range of options for buyers. High-end districts like Ash Shati and Al-Murjan see villa prices ranging from SR7,500 to SR13,350 per square metre. For those looking for more affordable properties, districts like Al-Amir Fawwaz offer villas starting at SR2,300 per square metre.

Coastal Properties and Future Outlook

Jeddah’s coastal areas, particularly those offering branded residences along the Red Sea, remain highly sought after. Districts like Obhur Al-Junobiyah command some of the highest values, with prices ranging from SR4,700 to SR7,400 per square metre. However, new developments in districts such as Al-Marwah, As Salamah, and As Safa have caused fluctuations in apartment sale prices as the market adjusts to a large influx of new supply.

Looking ahead, the continued growth in population, coupled with ongoing government investments in infrastructure and housing, positions Riyadh, Jeddah, and the Dammam Metropolitan Area for further expansion. With the housing sector playing a crucial role in the Kingdom’s efforts to diversify its economy under Vision 2030, real estate is set to remain a vital part of Saudi Arabia’s development.