Saudi Arabia Residential Real Estate Market

The Saudi Arabia Residential Real Estate market size is valued at SAR 18.1 Billion (USD 5.1 Billion) in 2021, expected to grow with a CAGR of 8% during the forecast period. Rapid urbanization, increasing migration from rural to urban cities in search of better amenities, and growing demand for housing real estate space are the primary factors accelerating the growth of the Saudi Arabia Residential Real Estate market during the forecast period. Moreover, the rapid economic development among various leading cities, such as Riyadh, Jeddah, Makkah, and Dammam Metropolitan Area (DMA), has enhanced income levels and boosted the growth of the Saudi Arabia Residential Real Estate market.

What is Residential Real Estate?

Real estate refers to land and improvements, including buildings, fixtures, roads, structures, and utility systems. Property rights give a title of ownership to the land, improvements, and natural resources such as minerals, plants, animals, water, etc. There are various types of real estate, each with a different purpose and utility, such as Land, Residential, Commercial, and Industrial. Residential real estate has housing for individuals, families, or groups of people, including single-family homes, apartments, condominiums, townhouses, and other types of living prospects.

Growth Driver

Rising demand for housing units and increasing affordable housing supply to address the huge demand

The growing demand for housing units in the young population, coupled with the introduction of recent government reforms and rising consumer income, are the primary factors driving the growth of the Saudi Arabia Residential Real Estate market during the forecast period. Moreover, the growing government initiatives such as implementing large-scale housing programs, incentivizing developers to build affordable housing projects, and increasing the role of the private sector in fulfilling the demand for residential units have further supported the growth of the Saudi Arabia Residential Real Estate market. Furthermore, the Saudi Arabia residential market is set to benefit in the longer term on account of the government’s decision to cut in transactional taxes, subsidies for first-time buyers, and reduced taxes that are charged on registrations and documentation while buying and selling properties, have resulted in the significant growth of the market. For instance, under the Vision 2030 initiative, the Saudi government is pushing towards increasing homeownership in the Kingdom to 70% by 2030. The homeownership rate has witnessed a steady growth over the last few years due to the government-led initiatives through the Ministry of Housing. The rapid growth in urbanization, rising number of citizens entering the workforce, and increasing popularity of nuclear families have increased the demand for smaller and more affordable housing units in the form of apartments during the forecast period.

Pre Covid-19 impact on the Saudi Arabia Residential Real Estate market

Rapid urbanization and increasing disposable income among consumers have stimulated the growth of the Saudi Arabia Residential Real Estate market in the pre-COVID era. The transaction volumes for real estate grown up greatly across the key cities of the Kingdom in the pre-COVID era. Furthermore, to fulfill its ambition of increasing homeownership by Saudi Arabia nationals, the Saudi Arabian housing ministry announced a blueprint to build approximately 19,500 residential units for its nationals in 2019. In partnership with the Real Estate Development Fund (REDF), the Ministry of Housing launched ‘Sakani II,’ aiming to deliver 300,000 residential products throughout the Kingdom in the pre-COVID era. These initiatives are expected to boost the homeownership rates in the country, which may support the residential real estate market in Saudi Arabia.

Covid-19 impact on the Saudi Arabia Residential Real Estate market

The COVID-19 pandemic has significantly hit the overall growth of the Saudi Arabia Residential Real Estate industry market in 2021 across the globe. The pandemic has severely affected every business segment due to various government norms such as nationwide lockdown and complete shutdown of construction activities across Saudi Arabian regions. Furthermore, residential real estate prices increased in 2020 despite the coronavirus pandemic due to increased demand for housing units among various top Saudi Arabian cities, such as Riyadh, Jeddah, Makkah, and Dammam Metropolitan Area (DMA). Even during the ongoing pandemic, the Saudi Arabia residential real estate market performed better than the commercial sector. By 2021, the residential sector outlook is expected to remain effective amid continued government support for the real estate industry under Saudi Vision 2030 goals.

Post Covid-19 impact on the Saudi Arabia Residential Real Estate market

The growing initiatives by Saudi Arabia’s Real Estate Development Fund (REDF), along with the Ministry of Housing and other government entities in the Kingdom’s housing sector development based on the Vision 2030 framework, are anticipated to witness significant growth in the Saudi Arabia Residential Real Estate market during the forecast period. Furthermore, Saudi Arabia is witnessing significant growth in the population, resulting in the increasing demand for housing units in the region during the forecast period.

Property Type Segmental Analysis

Based on the Property Type, the Saudi Arabia Residential Real Estate market is categorized into Houses, Apartments, Villas, Residential buildings, Residential lots, and others. The Apartments segment is expected to hold the highest share in the Saudi Arabia residential estate market in 2021 and continues this trend during the forecast period. This growth is attributable to the increasing demand for affordable and mid-range housing units among the young population, the increasing number of nuclear families, and the growing government initiatives in reducing house taxes and launching largescale housing units in the regions. Furthermore, the Villas segment is expected to witness significant growth in the Saudi Arabia residential real estate market in the coming years due to rapid economic development, rising consumer incomes, and increasing investment by government authorities along with the private organizations in the development of mid-range housing units in the major cities of the region.

Services Segmental Analysis

Based on the Services, the Saudi Arabia Residential Real Estate market is segregated into Development, Sales and Marketing, Brokerage, Property management, Lending, and Professional Services. The Household purpose segment is expected to hold the highest share in the Saudi Arabia Residential Real Estate market during the forecast period. The Development segment is expected to have the largest share in the Saudi Arabia residential real estate market in the coming years.

Region Segmental Analysis

The Residential Real Estate market is classified by Western Saudi Arabia, Northern and Central Saudi Arabia, Eastern Saudi Arabia, and Southern Saudi Arabia. The major cities of Saudi Arabia, such as Riyadh, Jeddah, Makkah, and Dammam Metropolitan Area (DMA), are expected to dominate the Saudi Arabia residential real estate market during the forecast period. This growth is attributable to the increasing residential transactions in these cities due to the increase in mortgages and the delivery of large-scale housing schemes. Furthermore, the increasing investment by various private organizations along with the Ministry of Housing and other government entities in the development of affordable and mid-range apartments in North Jeddah and other major cities has also boosted the growth of the Saudi Arabia residential real estate market.

Competitor Analysis

Companies include Jabal Omar Development Company, Kingdom Real Estate Development, Dar Al Arkan, Makkah Construction and Development, Al sedan Holding Company, Emaar, Sedco Development, Abdul Latif Jamal, Al Akaria, and other prominent players are the key players in Saudi Arabia Residential Real Estate market. Key Stakeholders

• Market research and consulting firms
• Industry associations
• Saudi Arabia Residential Real Estate firm
• Local Governments
• Regulatory bodies
• Suppliers
• Retailers

Government Policies

• Home Ownership: The Housing Vision Realization Program has set a target to increase homeownership for Saudi Arabian citizens to 70% BY 2030. Along with various private organizations, the government planned to increase affordability by reducing the ratio between the average residential unit price to the annual income per capita by five times.
• Sakani Housing Program: The Ministry of Housing and Saudi Arabia’s Real Estate Development Fund (REDF) initiative to subsidize fully constructed and to-be-built housing units across Saudi Arabia to provide access to residential plots and self-construction residential housing units, and under-construction housing units.

Scope of the Report

Report Attribute	Details
The market size in 2021	SAR 18.1 Billion (USD 5.1 Billion)
Growth Rate	8%
Historical data	2017 – 2020
Base Year	2021
Forecast period	2022 – 2028
Segments covered	By Property Type, By Services
Region covered	Western Saudi Arabia, Northern and Central Saudi Arabia, Eastern Saudi Arabia, and Southern Saudi Arabia
Key companies Profiled	Jabal Omar Development Company, Kingdom Real Estate Development, Dar Al Arkan, Makkah Construction and Development, Al sedan Holding Company, Emaar, Sedco Development, Abdul Latif Jamal, Al Akaria, and other prominent players

Market Modelling

By Product Type

• Houses
• Apartments
• Villas
• Residential buildings
• Residential lots
• Others

By Services

• Development
• Sales and marketing
• Brokerage
• Property management
• Lending
• Professional services

By Region

• Western Saudi Arabia
• Northern and Central Saudi Arabia
• Eastern Saudi Arabia
• Southern Saudi Arabia

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