Saudi Arabia’s Residential Market Sees Billion-Dollar Investment

DUBAI: A recent report from property consultant Knight Frank indicates that private buyers in Saudi Arabia are projected to invest $1.22 billion in the nation’s residential market this year. NEOM is emerging as the preferred location for these prospective homeowners.

Saudi Arabia, through its Public Investment Fund (PIF), has channeled substantial funds into large-scale projects, including NEOM, an ambitious urban and industrial development initiative spanning an area comparable to Belgium, situated along the Red Sea coast.

NEOM is designed to accommodate approximately nine million residents and plays a vital role in the Kingdom’s Vision 2030 economic diversification strategy, aimed at fostering growth beyond the oil sector.

According to a survey encompassing 1,037 households, including 100 expatriates residing in Saudi Arabia, Saudi nationals and Saudi-based expats intend to allocate $489 million to residential properties within the country.

The report further reveals plans to allocate $733 million to giga-projects. While NEOM continues to be a primary choice, the increasing variety in the market and the limited availability of move-in-ready homes have somewhat diminished its previously dominant position. Faisal Durrani, Knight Frank’s head of research for the Middle East and North Africa (MENA), noted in the report that NEOM’s popularity has decreased from 84% in 2023 to 17% this year.

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Durrani elaborated, “Several factors may contribute to this shift, including the introduction of new giga-projects in the past couple of years, perceptions regarding affordability of homes within NEOM’s subprojects, a shortage of ready-to-move-in properties, a limited number of homes available for purchase, or a combination of these elements.”

The property consultant’s research suggests that Saudi nationals and Saudi-based expatriates have approximately 2.75 billion riyals ($733.08 million) in potential private capital earmarked for residential real estate investments within the giga-projects.