Saudi Arabia’s real estate market is booming as homeownership becomes a priority for both nationals and expatriates.
A recent report by Knight Frank revealed that 72 percent of residents are actively looking to buy property. Demand is especially strong among high-income Saudis earning over SR50,000 ($13,300) per month, with 93 percent eager to purchase a home.
The survey of over 1,000 individuals, including 835 Saudis and 100 expatriates, also highlighted a rising interest in homeownership among non-citizens. Around 77 percent of expatriates expressed a desire to own homes in the Kingdom.
This shift reflects Saudi Arabia’s evolving real estate landscape as the country works toward its Vision 2030 goal of increasing homeownership to 70 percent. By the end of 2023, the homeownership rate had already reached 63.7 percent, putting the Kingdom on track to achieve this target.
Despite these gains, affordability remains a major challenge. Many aspiring homeowners are now considering renting as an alternative. In 2024 alone, housing transactions totaled SR267.8 billion across 236,690 sales. This marks a 37 percent increase in transaction volume and a 27 percent rise in value compared to the previous year.
Several key factors are driving this surge in homeownership demand. Many buyers see real estate as a smart investment, while others are drawn to family-friendly communities and high-quality housing. The survey found that 48 percent of respondents were seeking a primary residence, while 31 percent were looking for homes for their children or extended family. These figures indicate that real estate is not just a financial asset but also a long-term stability plan for many families.
Saudi Arabia’s property market has experienced significant price hikes, especially in major cities. Since 2019, apartment prices in Riyadh have surged by 75 percent, while villa prices have increased by 40 percent. In Jeddah, real estate transactions jumped 53 percent in 2024 alone, with property values rising by 43 percent. Dammam has also seen impressive growth, with residential transactions up by 49 percent and apartment prices increasing by 6.2 percent.
While the government is working to increase housing supply, affordability issues persist, particularly for middle-income buyers. Although luxury and premium housing options are expanding, many buyers struggle to find homes within their budget. Most prospective homeowners plan to spend between SR750,000 and SR2.5 million. However, market trends show a mismatch, as the average price of a four-bedroom villa in Riyadh stands at SR2.8 million—beyond the reach of many middle-class buyers.
Financing plays a crucial role in homeownership. According to the report, 58 percent of Saudi buyers rely on family support for their purchases, while 40 percent use self-financed solutions. Mortgage-backed transactions are also increasing, thanks to government initiatives such as Sakani and Dhamanat, which provide easier access to home loans.
The housing preferences of buyers are evolving. More than half of the survey respondents prefer villas, with wealthier Saudis favoring larger properties. However, townhouses and apartments are growing in popularity, especially among younger buyers and middle-income families seeking affordable alternatives. Riyadh and Jeddah remain the top choices for homebuyers, with 54 percent of respondents favoring the capital city as their preferred location.
Although property ownership remains strong, the rental market is also expanding. Many younger Saudis and expatriates are opting for rental properties due to rising housing costs. This trend reflects the dynamic nature of Saudi Arabia’s real estate market, where both homeownership and rental demand continue to evolve.
With Saudi Arabia making significant investments in its real estate sector as part of Vision 2030, the market’s future will be shaped by affordability, price trends, and shifting consumer preferences. As the Kingdom nears its 70 percent homeownership goal, how well the sector adapts to these challenges will determine its long-term success.
