Saudi Arabia invites applications for exploration permits in Riyadh, Madinah regions

RIYADH: The Organization of the Petroleum Exporting Countries reiterated its forecast for robust global oil demand growth in 2025, citing strong support from air and road travel.

In its monthly report released on Wednesday, OPEC projected that global oil demand will rise by 1.45 million barrels per day in 2025 and by 1.43 million bpd in 2026, with both forecasts remaining unchanged from the previous month.

OPEC noted that while trade concerns are expected to introduce volatility as new trade policies are rolled out, the global economy is expected to adapt.

In the same report, OPEC revealed that the broader OPEC+ group increased production by 363,000 bpd in February, with a significant boost coming from Kazakhstan, which has struggled to meet its OPEC+ output targets.

According to OPEC’s data, Kazakhstan’s production increased to 1.767 million bpd in February, up from 1.570 million bpd in January.

Although Kazakhstan has pledged to cut its output and compensate for overproduction, it has ramped up production at the Chevron-operated Tengiz oilfield, the country’s largest.

Meanwhile, Russia’s crude oil output slightly decreased by 0.04 percent to 8.973 million bpd in February, from 8.977 million bpd in January.

This was marginally below Russia's production target of 8.98 million bpd under the OPEC+ agreement. Russia’s quota is expected to rise to 9.004 million bpd starting in April as part of OPEC+'s planned gradual output increase.

Deputy Prime Minister Alexander Novak announced last week that OPEC+ had agreed to begin raising oil production in April, though this decision could be reversed if market imbalances arise.

RIYADH: Saudi Arabia’s residential real estate market is set for a significant surge, with private buyers expected to invest SR4.58 billion ($1.22 billion) this year, according to an analysis.

The Saudi Report 2025 by global property consultancy firm Knight Frank, conducted in collaboration with YouGov, highlights that investors are willing to pay substantial premiums for homes within the Kingdom’s mega-development projects.

The study, which surveyed 1,037 households, including 100 expatriates based in Saudi Arabia, found that SR2.75 billion of potential private capital, including SR2.62 billion from Saudi nationals and SR133.7 million from expatriates, is ready to be deployed into the Kingdom’s giga-projects.

NEOM has emerged as the most sought-after destination, with 41 percent of respondents earning over SR80,000 per month expressing an intent to spend more than SR20 million on homes in such large-scale developments.

The findings underscore the growing demand for premium residential offerings in these transformative projects, which align with the Kingdom’s Vision 2030 economic diversification agenda.

“While NEOM continues to take pole position in the hearts and minds of Saudi nationals as a location they would like to live in, its popularity has decreased from 84 percent in 2023 to 17 percent this year,” Faisal Durrani, partner and head of research for MENA at Knight Frank, said.

He continued: “There are likely to be a range of reasons for this, including the emergence of other giga-projects over the last two years, perceptions around households’ ability to afford to own a home in any of NEOM’s subprojects, a lack of ready-to-move-into homes, a lack of homes actually on the market to purchase, or a combination of the above. These factors present a clear blueprint for how NEOM’s developers can boost absorption rates once homes are made available to purchase.”

According to Knight Frank, NEOM was found to be the most desirable giga-project among Saudi nationals, although those on monthly incomes of SR10,000 to SR50,000 showed a higher level of interest in living in the Belgium-sized super-city than those with incomes in excess of SR50,000.

For the latter group, Jeddah Central had greater appeal, representing 14 percent, with NEOM following in second place.

While expats with a monthly income of over SR30,000 also favor NEOM as their most preferred location to own a home, it is notable that 20 percent of all the expats surveyed have no desire to purchase residential real estate in any of the giga-projects.

“The relatively low appetite among expats to purchase a home in any of the giga-projects likely stems from a lack of understanding of what will eventually be available, a lack of proof of concept, difficulty in navigating expat ownership rules, financing challenges, or indeed a combination of the above,” Susan Amawi, general manager at Knight Frank  Saudi Arabia said.

She added: “We expect this to change over time, especially once details of the much-anticipated change to foreign ownership laws are unveiled.”

NEOM has awarded construction contracts worth $28.7 billion as of early 2025, with $100 million allocated to Magna and an additional $10.5 billion for The Line, according to an analysis by Knight Frank.

Saudi nationals and expatriates earning SR10,000 to SR20,000 per month showed the highest level of interest, followed by those with incomes between SR20,000 and SR30,000.

Meanwhile, 29 percent of respondents earning SR40,000 to SR50,000 also expressed a desire to buy a home in The Line.

However, Durrani noted a shift in preferences among higher-income groups.

“The apparent tapering in the desirability of The Line as a place to live and own a home as incomes grow could be a reflection of the perception of The Line as a ‘mass-market project,’ with those on higher incomes perhaps in favour of somewhere more exclusive,” he explained.

Durrani added: “Indeed, our results have shown that the largest proportion of those on monthly incomes of between SR70,000 and 80,000 would prefer to own a home at the Red Sea Project and King Salman Park. For this group, NEOM overall trails at just 5 percent.”

Saudi Arabia’s leading residential developer, ROSHN, has also emerged as a key player in the Kingdom’s giga-projects.

According to Knight Frank, ROSHN’s SEDRA development in Riyadh is the most sought-after project, with 39 percent of respondents selecting it as their top choice.

ROSHN’s focus on affordable homes in integrated community settings has played a pivotal role in its widespread appeal.

Other highly sought-after ROSHN developments include Warefa in Riyadh and Marafy in Jeddah.

Tariq de Jong, regional head of residential research at Knight Frank, emphasized ROSHN’s rising prominence among Saudi homebuyers.

“Away from NEOM, Saudi nationals and Saudi-based expats are actively targeting projects by ROSHN, which ranks alongside Jeddah Central as the second most popular giga project home purchase location,” Harmen de Jong, partner and regional head of Strategy & Consulting for Saudi Arabia at Knight Frank, said.

He concluded: “ROSHN has positioned itself as the Kingdom’s leading residential community developer and is working toward setting new benchmarks in creating integrated neighborhoods that blend modern living with traditional Saudi heritage, all crucially anchored by community facilities and amenities which are in high demand and in short supply.”