ESTATE BREW-Saudi Arabia Real Estate Market 2024 in Recap
Robust Growth: Saudi Arabia's real estate sector demonstrated significant expansion in 2024, with the Real Estate Price Index increasing by 3.6% year-over-year in the fourth quarter. This growth re...
Saudi Arabia Real Estate Market Newsletter – 2024 Year in Review
February 2, 2025
Market Overview
Robust Growth: Saudi Arabia's real estate sector demonstrated significant expansion in 2024, with the Real Estate Price Index increasing by 3.6% year-over-year in the fourth quarter. This growth reflects the Kingdom's ongoing efforts to diversify its economy and reduce dependence on oil revenues.
Economic Diversification: The nation's Gross Domestic Product (GDP) grew by 1.3% in 2024, primarily driven by non-oil sectors. This positive trajectory underscores the effectiveness of Vision 2030 initiatives aimed at broadening the economic base.
Residential Sector Highlights
Surge in Property Values: Major cities experienced notable increases in residential property prices. Riyadh saw a 10% year-on-year rise, while Jeddah reported a 5% increase in the first half of 2024. These upticks indicate a strong demand for housing in urban centers.
Elevated Rental Yields: The rental market also witnessed substantial growth. Riyadh's rental yields grew by 9%, and Jeddah's by 4% over the same period, reflecting heightened demand for rental properties.
Commercial Real Estate Developments
Office Space Demand: In Riyadh, the demand for quality office spaces remained high, driven by both international and local companies establishing or expanding their presence. Rental averages increased across all segments:
Prime: Up by 10.7% year-on-year.
Grade A: Increased by 11.5%.
Grade B: Rose by 14.6%.
Occupancy rates remained robust, with Grade B offices maintaining a 99.4% occupancy rate, and Prime and Grade A spaces achieving near-full occupancy.
Tourism and Mega-Projects
some explainations:-This is a part of the new seven days launch as we missed alot due to a break in 2024 last month, one country daily for seven days from now, if you want to add a country for us to summarize please check out gumroad the added country will stay for all weekly articles in the first month
or you can just join our discord and not add any countries https://discord.gg/W2DkX3XX
NEOM and The Line: As part of the ambitious NEOM project, "The Line" was announced—a 170 km-long, 500-meter tall city designed to house nine million residents. This linear city aims to revolutionize urban living with a focus on sustainability and smart technology.
Red Sea Project: The Red Sea Project continued to make strides, aiming to establish a luxury tourism destination along the Red Sea coast. The development focuses on sustainability and is set to significantly boost the hospitality sector upon completion.
Sharaan by Jean Nouvel: In AlUla, the Sharaan resort, designed by renowned architect Jean Nouvel, is under development. Carved into the rocks of the Hejaz mountains, this luxury resort draws inspiration from the Nabatean civilization and is set to offer exclusive villas and suites, enhancing the Kingdom's cultural tourism appeal.
Jeddah Tower: After years of delays, construction of the Jeddah Tower resumed. Set to become the world's tallest building at over one kilometer high, the project aligns with Saudi Arabia's Vision 2030 and symbolizes the nation's future aspirations.
Regulatory and Investment Climate
Opening Holy Cities to Foreign Investment: In a landmark decision, Saudi Arabia permitted foreign investment in publicly listed companies owning real estate in Mecca and Medina. This move aims to increase liquidity for projects related to Islamic pilgrimage, a significant revenue source for the country.
Strategic Partnerships: The Kingdom strengthened international ties, exemplified by agreements with Italy worth approximately $10 billion. These partnerships are expected to enhance various sectors, including real estate and infrastructure.
Consumer Trends and Market Dynamics
Urbanization and Housing Demand: The trend towards urban living continued, with increased demand for residential properties in major cities. This shift is driven by a growing population and the influx of expatriates, leading to a surge in housing developments.
Sustainable Living: There is a rising consumer preference for sustainable and eco-friendly housing options. Developers are responding by incorporating green building practices and energy-efficient designs into new projects.
Challenges and Considerations
Labor Practices: Concerns regarding the treatment of migrant workers have been highlighted, especially in the context of upcoming international events like the 2034 FIFA World Cup. Addressing these issues is crucial for the Kingdom's global image and the successful execution of mega-projects.
Market Saturation: The rapid development of large-scale projects raises questions about potential oversupply in certain real estate segments. Continuous market analysis is essential to ensure balanced growth and sustainable returns on investment.
Looking Ahead
Saudi Arabia's real estate market is poised for continued growth as Vision 2030 initiatives progress. The focus on mega-projects, economic diversification, and regulatory reforms is expected to attract both domestic and international investors.
The emphasis on sustainability and innovation positions the Kingdom to become a leader in the global real estate arena.
For more detailed insights and analysis, please refer to the comprehensive reports.