The Saudi Arabian real estate market is experiencing a noticeable fluctuation in residential property prices, as revealed in the latest specialized economic reports. This fluctuation is a direct reflection of the market correction it is undergoing, in addition to the impact of macroeconomic factors and ongoing government initiatives to regulate the sector.
Current scene: Riyadh is acting independently
Looking at the real estate landscape of the Kingdom, we find that the capital, Riyadh, presents an exceptional case compared to other major cities like Jeddah and Dammam. The continuous rise in residential property prices in Riyadh, whether for villas or apartments, is attributed to increased demand resulting from internal migration and the attraction of skilled workers, in line with the strategy to make Riyadh one of the top 10 city economies in the world. The decision to relocate the regional headquarters of international companies to Riyadh has also contributed to increased pressure on the real estate supply, pushing prices to new record highs.
Historical context and Vision 2030
This disparity cannot be understood in isolation from the radical transformations brought about by the Kingdom's Vision 2030. Since its launch, the government has set a strategic goal of increasing homeownership among citizens to 70% by 2030. To achieve this, billions of riyals have been injected through housing support programs and the legislative environment has been developed through the General Authority for Real Estate. This historic momentum has transformed the market from haphazard to organized, but it has also created new supply and demand dynamics that vary from region to region.
Changing consumer preferences and economic factors
One factor influencing price variations is the noticeable shift in Saudi household preferences. With rising interest rates globally and locally in recent years, and the resulting impact on mortgage financing costs, demand has gradually shifted from large villas to more affordable apartments in strategic locations. This shift has led to significant price increases in the apartment sector, while other sectors have experienced stability or slower growth.
Economic impact and future prospects
This variation in performance carries significant economic implications; it indicates the maturity of the Saudi real estate market and its ability to absorb changes. Experts expect this variation to continue in the medium term, with areas experiencing mega-projects and infrastructure development remaining the epicenters of price growth. Conversely, other areas may witness price stability that favors buyers, thus enhancing homeownership opportunities for a broad segment of the population and supporting the stability of the non-oil economy, of which real estate is a key pillar.
