Saudi Arabia’s Minister of Investment, Khalid Al-Falih, affirmed that the real estate and construction sector has become a cornerstone of the national economy, contributing 13% to the Kingdom’s GDP. This announcement came during his participation in a panel discussion at the “Future Real Estate Forum,” a strategic platform for discussing the current state and future of the sector amidst the major economic transformations underway in the country.
Al-Falih explained that the figures reflect the dynamism of this sector, noting that its contribution to total fixed capital formation reached 23%, a strong indicator of the substantial assets and investments being injected into infrastructure and urban development projects. He added that the sector is witnessing not only quantitative growth but also qualitative growth, through the increasing number of companies that have recently launched their projects, which enhances competitiveness and raises the quality of the real estate supply.
A key driver for Vision 2030
These figures directly reflect the objectives of Saudi Vision 2030, which prioritizes diversifying income sources and reducing dependence on oil. The real estate sector is a key driver for many other related sectors, such as tourism, entertainment, retail, and logistics. Mega-projects like NEOM, Qiddiya, and the Red Sea Project rely on a robust and sophisticated construction sector for their infrastructure, which explains the significant increase in fixed capital formation.
An attractive environment for foreign investment
In a related context, the Minister of Investment explained that the real estate sector offers healthy and rewarding returns for investors, making it a preferred destination for capital. He pointed out that the legislative and regulatory reforms the Kingdom has witnessed in recent years, including the modernization of real estate regulations and the enhancement of transparency through the General Authority for Real Estate, have contributed significantly to the market's maturity. This maturity has been a crucial factor in attracting foreign direct investment, which has seen successive inflows and continuous growth, as international investors now view the Saudi real estate market as a safe and promising opportunity.
Sustainable economic impact
Al-Falih concluded by emphasizing that real estate is not merely buildings, but a cornerstone of comprehensive economic growth, contributing to the creation of thousands of jobs for citizens and supporting local content through demand for building materials and engineering services. With continued government and private spending on housing and infrastructure projects, experts anticipate that this sector's contribution to GDP will continue to rise in the coming years, further solidifying the Kingdom's position as a global investment hub.
