Saudi Arabia’s Residential Market Anticipates $1.22 Billion in Private Buyer Spending

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. The report highlights NEOM as the most desirable location for property acquisition.

Saudi Arabia, through its Public Investment Fund (PIF), has channeled substantial investments into large-scale projects, including NEOM, an ambitious urban and industrial development intended to cover an area nearly the size of Belgium along the Red Sea coast.

NEOM is planned to accommodate approximately nine million residents and plays a pivotal role in the kingdom’s Vision 2030, an 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 real estate within the country.

The report further reveals that they plan to earmark $733 million for giga-projects. While NEOM remains the preferred choice, increased market options and a limited supply of move-in-ready homes have diminished its once-dominant standing. Faisal Durrani, Knight Frank’s head of research for the Middle East and North Africa (MENA), noted that NEOM’s popularity has decreased from 84% in 2023 to 17% this year.

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Reasons for the Shift

Durrani stated, “Several factors likely contribute to this shift, including the emergence of alternative giga-projects in the past two years, perceptions regarding affordability within NEOM’s subprojects, a scarcity of ready-to-move-into residences, a limited availability of properties for purchase, or a combination thereof.”

Research from the property consultant suggests that Saudi nationals and Saudi-based expatriates possess 2.75 billion riyals ($733.08 million) in potential private capital ready for investment in residential real estate within the giga-projects.