The real estate sector in Saudi Arabia has experienced a remarkable upsurge since the onset of 2024, amassing over 280,000 property deals valued at more than SAR636 billion ($169.5 billion), and encompassing a combined space exceeding two billion square meters.
This impressive performance has led to the sector accounting for 5.9 percent of Saudi Arabia’s GDP in the last quarter of 2023.
Activity on the Real Estate Stock Exchange
In the week concluding on June 22, 2024, the real estate stock exchange was abuzz with 518 transactions worth over SAR331.7 million, covering nearly 900,000 square meters. The peak price per square meter soared to approximately SAR15,000, with the mean price standing at SAR371.
Neighborhoods with the Most Trading Activity
The Al-Wisam district in Jeddah clinched the top spot for most traded area on the real estate stock exchange during the week, with deals surpassing SAR89.3 million. It was followed by Riyadh’s Arid district with transactions worth SAR6.35 million. Additionally, Riyadh’s Al-Rimal neighborhood, Jeddah’s Jawharat Al-Arous, and the northwestern district of Al-Bukayriyah also featured prominently, with respective deal values of SAR5.59 million, SAR3.98 million, and SAR700,000.
High Transaction Volume Indicates Investor Trust
Market specialists regard the real estate sector as a refuge, especially given the turbulence in the stock and gold markets, along with the repercussions of escalating interest rates. The Saudi real estate market’s robust and consistent expansion across various segments is evidently backed by investor confidence in governmental policies and the infusion of significant capital into landmark projects like Qiddiya, NEOM, and the Red Sea development.
Observers also highlight that the Saudi real estate market’s performance is a testament to sustained demand and growth. The substantial volume and magnitude of exchanges recorded via the real estate exchange reflect the investors’ trust, which is a nod to governmental initiatives and the economic rejuvenation efforts under Vision 2030.
The Economic Significance of Real Estate
Acting as a fundamental pillar of the Saudi economy, the real estate sector makes a substantial contribution to the gross domestic product with hefty investments and sizeable development ventures.
State-led initiatives aiming to regulate and stimulate investments in the real estate arena have not only invigorated the economy but also expanded employment prospects for the populace and introduced a gamut of new proficiencies in the real estate domain. These measures have helped to curb unemployment rates and propelled sustainable development forward.
Factors Underpinning Sustainable Growth
Several factors are credited with underpinning the sustained growth and resilience of the Saudi real estate sector. These include economic reforms, investment-friendly policies, government measures to enhance the business milieu, the execution of mega projects that magnetize investments, the spiking demand for housing and allied services due to urbanization, and the political and economic stability that boosts investor confidence for long-term commitments in the property market.