Overview of the Saudi Arabian Real Estate Market

With over 36 million people and a strong economy, the country offers many opportunities for real estate investors and developers. One of the key drivers of the Saudi Arabian real estate market is the country’s massive infrastructure spending. The government is investing heavily in building new roads, bridges, airports, and other transportation infrastructure and developing new industrial and commercial areas. This has led to a growing demand for office space, warehouses, and other commercial properties, as well as for residential properties to accommodate the country’s growing population.

New Real Estate Law Allowing Foreign Ownership in Saudi Arabia

Soon, foreigners will be permitted to possess all real estate types, including commercial, residential, and agricultural properties. The initial interpretation of the law indicates that it grants foreign individuals the right to own properties throughout the Kingdom, including in Makkah and Madinah. This is a significant change from the previous law, which only allowed non-Saudis to lease property for a limited time. With the introduction of this new law, the Saudi Arabian government hopes to attract foreign investment and boost the economy by creating a more transparent and secure real estate market.

Economic Outlook for the Saudi Arabian Real Estate Market

The World Bank has reported that Saudi Arabia’s GDP experienced a growth rate of 8.6% at the close of 2022 but is projected to slow down to 3.7% in 2023 and 2.3% in 2024. The real estate sector’s rebound after the pandemic is being driven by a rise in tourism demand and the government’s investment in infrastructure projects like the King Salman International Airport.

Factors Driving the Saudi Arabian Real Estate Market

Saudi Arabia has also been investing in its tourism industry in recent years, which has led to a growing demand for hotels, resorts, and other tourism-related properties. The country has launched several ambitious projects expected to attract millions of tourists annually. Another factor driving the Saudi Arabian real estate market is the country’s large expatriate community. Many foreign workers come to Saudi Arabia for work, requiring housing during their stay. This has led to a booming market for rental properties, especially in major cities such as Riyadh, Jeddah, and Dammam.

Segments of the Real Estate Market in Saudi Arabia

The real estate market in Saudi Arabia is divided into several segments, including:

• Hospitality market
• Residential market
• Office market
• Retail market
• Industrial and logistics market

The residential sector is the largest, accounting for around 70% of the total real estate market, followed by commercial properties, which comprise approximately 20%. The hospitality market, including hotels and resorts, is also a significant segment.

Residential Complexes within and around Mega Projects in Saudi Arabia

The Kingdom of Saudi Arabia may experience a surge in its real estate market in the coming decade as the government’s multimillion-dollar economic initiatives, such as NEOM and the Red Sea project, attract investors to the region. Some of the mega projects that will have residential complexes are:

Real Estate Licensing in Saudi Arabia with Al Taasis

Obtaining a real estate license is crucial for professionals looking to enter the real estate sector. In Saudi Arabia, a real estate license is a legal requirement for anyone who wants to work in the real estate industry, whether as a broker, sales agent, property manager, or developer. We assist you with the licensing process and help you enter the booming Saudi real estate market conveniently.

Contact us to know more about the prerequisites of your business journey.