Saudi Vision 2030 housing: Knight Frank highlights Saudi Arabia’s push for increased homeownership through Vision 2030 initiatives and household formation

In a significant effort to meet housing demand and boost homeownership, Saudi Arabia must construct 115,000 new homes annually over the next six years, as outlined in a recent report by real estate consultancy Knight Frank. This initiative is a key part of Saudi Vision 2030 housing goals, aiming to raise the homeownership rate to 70% by 2030, up from the current 63.7%.

The report underscores the critical role of housing in Saudi Arabia’s broader economic strategy, with Christopher Payne, Knight Frank MENA’s partner and chief economist, emphasising the wider benefits of homeownership. “The Kingdom is not just building homes; it is creating a foundation for economic stability, wealth generation, and stronger community engagement,” Payne remarked. An active housing sector, he added, offers increased flexibility and resilience for Saudi citizens.

This drive aligns with Saudi Arabia’s Vision 2030, which seeks to diversify the economy away from oil dependence by investing in sectors like real estate, tourism, and infrastructure. The housing sector, in particular, is seen as a key pillar of this transformation, aiming to unlock economic potential by catering to a young and expanding population.

Collaborative efforts to drive the housing supply

Saudi Arabia’s housing strategy relies on a collaborative approach involving both public and private stakeholders. The Ministry of Municipalities and Housing (MOMAH), alongside the National Housing Company (NHC), is leading these efforts, mobilising resources to ensure affordable and diverse housing options are available. Knight Frank highlighted that this concerted effort is essentially a “national housing programme,” leveraging partnerships to bridge the gap between supply and demand.

Recent initiatives include deals with international firms like Egypt’s Talaat Moustafa Group, which will build over 27,000 homes, and China’s CITIC Construction Group, focused on developing an industrial city dedicated to construction materials. These collaborations are expected to streamline construction processes and reduce costs, facilitating the rapid deployment of housing projects across the Kingdom.

“The ministry’s proactive initiatives have already resulted in increased spending on residential construction, which rose from 5.5 per cent of non-oil GDP to 8.5 per cent in 2022,” Payne noted, highlighting the momentum gathered in the sector.

Marriage-driven household formation fuels demand

One of the primary drivers behind the surge in housing demand is the increasing rate of household formation, particularly through marriage. Knight Frank’s projections suggest that 65 per cent of the 825,000 new homes needed by 2030 will be driven by this demographic shift, while the remaining 35 per cent will support the Kingdom’s target of boosting homeownership rates among Saudi nationals.

The government’s Sakani programme, which was launched in 2017, has been instrumental in supporting homeownership for low- and middle-income families. The scheme has already facilitated over 800,000 housing contracts, spanning a variety of property types, including ready-built homes, off-plan units, and self-construction projects. By offering mortgage guarantees, loan subsidies, and reduced payments, Sakani has significantly eased the path to homeownership for many Saudi families.

Riyadh at the heart of Saudi Arabia’s housing expansion

As Saudi Arabia’s economic powerhouse, Riyadh is expected to be a focal point for new housing developments. With rapid urbanisation and increasing demand driven by economic growth, the capital is already experiencing a significant surge in property values. Knight Frank’s report revealed that apartment prices in Riyadh have jumped by 62 per cent, while villa prices have risen by 37 per cent over the last three years.

Future phases of the Sakani programme will continue to enhance housing affordability, with plans to introduce additional incentives for developers and expand the range of available housing options. Complementing these efforts is the ministry’s Etmam initiative, an innovative platform that provides streamlined online access for project approvals. This “one-stop” service is designed to expedite construction projects, reducing bureaucratic hurdles and accelerating delivery times.

A Vision for sustainable growth

Knight Frank concluded that Saudi Arabia’s proactive housing strategies are set to unlock substantial economic benefits, creating a “virtuous cycle” of stability and growth. By focusing on housing, the Kingdom is not only catering to immediate demands but also laying the groundwork for a more prosperous and diversified economy.

“With a young and expanding population, the potential for economic growth through strategic housing investment is immense,” the report stated. By meeting its ambitious 2030 homeownership targets, Saudi Arabia is positioning itself as a model for sustainable urban development in the Middle East.

As the Kingdom pushes forward with its Vision 2030 objectives, the construction of new homes will remain a central focus. The success of these initiatives will ultimately depend on continued collaboration between the government, private sector, and international partners to ensure that the housing needs of Saudi citizens are met.