ALBAWABA - The real estate market in Saudi Arabia has witnessed significant activity since the government launched a plan in 2016 aimed at providing homes for its citizens. Experts anticipate a surge in property prices following the permission for foreigners to own and obtain premium residency.
Earlier this month, Saudi Arabia unveiled four types of premium residencies, offering foreigners benefits similar to those enjoyed by Saudi citizens, such as permanent residency with family in the kingdom, including residency through property ownership.
Hossam Ahmed, Sales Management Director at Al Rajhi Investment Company, predicted a 25% to 40% increase in property prices in Saudi Arabia in the coming period. Speaking at the "Future of Real Estate Forum 2024" in Riyadh, Ahmed emphasized that this type of residency presents a unique opportunity for the real estate market, potentially contributing to sector growth by over 300%.
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Ahmed, in an interview with Al Sharq channel, stated that interest rate impacts would be limited given the current situation in Saudi Arabia and the introduction of premium residency, expecting substantial growth in the real estate market in the near future.
These expectations align with the views of Khaled Al Mubayed, CEO of Real Estate Platforms, who anticipates increased demand for housing units valued at a minimum of one million US dollars, the approximate minimum value for property ownership granting premium residency.
Al Mubayed, in an interview with the Arabic version of The Independent, believes that the introduction of premium residency will create greater demand. This, in turn, presents an opportunity for real estate developers to construct larger units to meet this demand. Saudi Arabia is expected to witness a surge in residential construction in major cities in the coming period.
Abdullah Al-Hammad, CEO of the General Authority for Real Estate, stated during the real estate forum's opening that the announcement of massive projects has made Saudi Arabia the world's largest construction site with trillion-dollar projects since the Vision 2030 declaration in 2016. Many government and private real estate projects are concentrated in the capital, Riyadh, as the kingdom plans to increase the city's population from 7.5 million to between 15 and 20 million by 2030.
Mohammed Al-Suwailem, the official spokesperson for the Ministry of Municipal and Rural Affairs and Housing, mentioned that Saudi Arabia's housing system has served more than 1.5 million Saudi families through various housing solutions since the launch of the Sakani program in 2018 until the end of 2023.
During the forum, Al-Suwailem noted that the Saudi housing system between 2018 and 2023 introduced more than 450,000 land and housing units, including free lands. The focus has been on major residential suburbs with educational, commercial, and service facilities.
The real estate financing volume during this period reached 650 billion riyals, including over 750,000 state-supported financing contracts. The Saudi Real Estate Development Fund covered the payment of financing contract profits for beneficiaries of self-building and under-construction housing units, with a total deposit in beneficiaries' accounts reaching around 55.9 billion riyals since the announcement of the Transformation Program in June 2017 until January 2024.
