Saudi Arabia’s Residential Market Anticipates $1.22 Billion Private Investment

According to a report issued on Tuesday by property consultant Knight Frank, private buyers in Saudi Arabia are projected to inject $1.22 billion into the nation’s residential market this year. The report indicates that NEOM is the most preferred location for prospective homeowners.

Saudi Arabia has allocated significant funds through the Public Investment Fund (PIF) towards ambitious “giga-projects.” Among these is NEOM, an extensive urban and industrial development initiative, almost the size of Belgium, planned along the Red Sea coast.

NEOM is designed to accommodate approximately nine million residents and is a critical element of the kingdom’s Vision 2030 economic diversification strategy, which aims to develop new growth sectors beyond the oil industry.

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

The report also reveals that they plan to earmark $733 million for giga-projects. While NEOM remains the top choice, its dominance has been affected by increased market options and a scarcity of move-in-ready properties, the report stated. 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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Durrani added, “Several factors likely contribute to this shift, including the rise of other giga-projects in the past two years, perceptions regarding the affordability of homes within NEOM’s subprojects, a shortage of readily available homes, a lack of properties on the market for purchase, or a combination of these issues.”

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