Population growth, regulatory reforms and tourism reshaping Saudi real estate sector

Population growth, regulatory reforms and tourism reshaping Saudi real estate sector
Strengthening the real estate sector is key for Saudi Arabia as it seeks to diversify its economy, Shutterstock
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Updated 16 March 2025
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Population growth, regulatory reforms and tourism reshaping Saudi real estate sector

Population growth, regulatory reforms and tourism reshaping Saudi real estate sector

RIYADH: Saudi Arabia’s real estate sector is poised for robust expansion thanks to an increasing population, growth in the tourism industry, and friendly government policies and regulatory reforms, experts told Arab News. 

The Kingdom’s Real Estate General Authority expects the property market to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024. 

Strengthening this sector is crucial for Saudi Arabia as it seeks to position itself as a global hub for tourism and business, by reducing its decades-old reliance on crude revenues. 

Speaking to Arab News, Matthew Green, head of research at CBRE in the Middle East and North Africa region, said that the expansion of the Kingdom’s real estate market is also influenced by various other factors including rapid urbanization, infrastructure development, and the rise in foreign direct investments.

“Saudi Arabia’s real estate market is supported primarily by the government’s aggressive investment program, particularly toward the giga-projects, which is driving non-oil production, fueling employment and population growth, and attracting FDI,” said Green. 

He added: “The country’s supportive demographics, which are characterized by the presence of a significant young and well-educated population, increasingly liberalized, and a rising middle class with greater disposable income levels than previous generations is also driving the growth of the real estate market in the Kingdom.”




CaptionMatthew Green, head of research at CBRE in the Middle East and North Africa region. Supplied

Saud Al-Sulaimani, country head of JLL in Saudi Arabia, echoed those views and said that government policies, including the Sakani program and Real Estate Investment Trusts — as well as new mortgage laws and foreign ownership regulations — are propelling the growth of the property sector. 

“Sakani program supports home ownership by providing financial aid and land to Saudi citizens, while REITs encourage institutional investment in the sector,” he said.

“Relaxed ownership laws are making the Kingdom’s real estate market more attractive to international investors. All these factors are driving the growth of the real estate sector in the Kingdom.”

Founded in 2017 by the Saudi Ministry of Housing and the Real Estate Development Fund, the program aims to increase the proportion of families that own a home in the Kingdom to 70 percent by 2030, in line with the economic diversification strategy Vision 2030.




Saud Al-Sulaimani, country head of JLL in Saudi Arabia. Supplied

In January, Saudi Arabia’s Capital Market Authority approved foreigners to invest in Saudi-listed companies owning real estate in Makkah and Madinah. 

Effective from Jan. 27, the amendment aims to boost the capital market’s competitiveness and align with the Vision 2030 economic diversification objectives, the authority said in a statement.

“The landmark change to allow international investors to access the property markets in the Holy Cities through listed companies, announced this week, will help to begin addressing the pent-up demand from international investors hungry to access real estate markets in the Kingdom’s Holy Cities,” Faisal Durrani, head of research at Knight Frank, told Arab News. 

He added: “This change in investor rules, combined with last January’s introduction of Premium Residency Visas, one of which is connected to property ownership, is a clear indication of the direction of travel and the strongest hint yet of authorities’ plans around boosting inward international real estate investment.”




Faisal Durrani, head of research at Knight Frank. Supplied

Susan Amawi, general manager of Knight Frank in Saudi Arabia, said that construction activities in Saudi Arabia are expected to rise in the coming years with the Kingdom targeting to deliver 1.04 million homes by the end of the decade. 

“Government programs such as Wafi and Sakani have pushed the national homeownership rate to around 64 percent; however surging home values are testing the limits of affordability. With plans underway to deliver 1.04 million homes across the country by 2030, we expect to see a significant ramping up in construction activity and jobs as the 2030 deadline nears,” said Amawi. 

Regional headquarters program driving growth

Al-Sulaimani told Arab News that the regional headquarters program is one of the crucial factors acting as a catalyst for growth of the commercial real estate sector in the Kingdom.

“The program has led to increased demand for high-quality office spaces and mixed-use developments, spurring investments across key industries, including offices, hospitality, and data centers,” he said.

The JLL official added: “This influx of international businesses is reshaping real estate dynamics, with an increased focus on smart technologies, sustainability, and specialized assets, creating a thriving environment for global talent.” 




Saudi Arabia’s Minister of Investment Khalid Al-Falih presented IBM executives with a regional HQ license in April 2024. IBM

Knight Frank’s Amawi said that the strong economic growth in the Kingdom, combined with the regional headquarters program has driven up demand levels for premium office space, while vacancy rates have approached record lows of around 2 percent in Riyadh. 

“Office rents for Grade A space in Riyadh too have responded to the sharp upturn in occupier requirements, rising by 51 percent in the last three years alone,” said Amawi. 

Real estate and tourism 

Durrani said that Saudi Arabia’s ambition to attract more than 150 million visitors by the end of the decade is creating several opportunities in the hospitality real estate sector. 

“For domestic tourism to flourish in Saudi Arabia, care and attention must be paid to the development of attractions in secondary and tertiary cities if they are to compete and thrive alongside all the new giga-project hospitality offerings,” he said.

Durrani added that cost-effective accommodation facilities are needed to meet the demand of travelers and address the issue of expensive stays. 

“With 28 percent of Gen Z Saudis highlighting high costs as a barrier to domestic travel … so there remains an opportunity to develop more cost-effective accommodation options,” added Durrani. 

Green of CBRE echoed similar views and said that diverse accommodation options are crucial to strengthening the real estate sector in the Kingdom. 

He flagged the need for a mix of hotel rooms, long stay suites, private unit rentals — such as Airbnb — as well as lower cost hostels and other budget-friendly room options.

Al-Sulaimani said that the launch of high-profile and futuristic mega and giga-projects attracted global attention and investments, and symbolizes a progressive shift in Saudi urban development. 

“The focus on tourism and entertainment, alongside massive investments in infrastructure, from transportation to utilities and logistics, are creating a more conducive environment for real estate development,” said the JLL official. 

Real estate and technology

Al-Sulaimani added that the adoption of new technologies and digital solutions is critical to streamlining operations and boosting the efficiency of the Saudi property landscape. 

He said advanced technologies to create smart, sustainable, and highly efficient urban environments are fueling innovations and unlocking new growth opportunities for property tech in the Kingdom. 

“Companies can leverage AI and data analytics to enhance transparency, improve decision-making, and predict market trends. The development of smart cities focuses on integrating IoT and sustainable technologies, offering residents an improved quality of life,” said Al-Sulaimani. 

Green shared that view, and said improving customer experience and service through technology adoption should be a key target for all companies operating in the real estate sector. 

“In the context of the real estate market, the use of virtual and augmented reality for property tours and AI-powered chatbots for instant support and more personalized feedback are becoming more common globally but continue to lag in parts of the region,” said Green. 

He added: “In addition, generating efficiencies and streamlining operations through use of property management software and better integration of smart building technologies can also enhance property value and tenant comfort.” 

Uniqueness of Saudi Arabia’s real estate sector 

Speaking with Arab News, experts unanimously highlighted the uniqueness of the housing sector in Saudi Arabia.

“The Kingdom’s real estate market is one of the fastest growing globally and certainly of the most exciting. The opportunity for investors continues to grow as the government unveils ever more ambitious projects, designed to spur economic growth in the non-oil sector and to also showcase Saudi Arabia’s arrival on the global investment stage,” said Amawi. 

Green said that the ongoing construction of giga-projects gives the Kingdom’s real estate sector an upper hand compared to other countries in the region. 

The CBRE official added that Saudi Arabia’s rich cultural heritage is also a further standout for tourism-related developments, creating a unique opportunity to establish a tangible cultural tourism offering in the region. 

“The size and scale of the Saudi’s giga-projects remain a notable differential against other regional markets, with the Kingdom still very much in its nation-building stage against more mature real estate markets in the UAE,” said Green.


Closing Bell: Saudi stock markets rise; TASI climbs over 1%

Closing Bell: Saudi stock markets rise; TASI climbs over 1%
Updated 16 March 2025
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Closing Bell: Saudi stock markets rise; TASI climbs over 1%

Closing Bell: Saudi stock markets rise; TASI climbs over 1%

RIYADH: Saudi Arabia’s Tadawul All Share Index saw a positive close on Sunday, gaining 127.90 points, or 1.09 percent, to settle at 11,853.78.

The benchmark index recorded a trading turnover of SR4.67 billion ($1.24 billion), with 207 stocks advancing and 35 declining.

Similarly, the Kingdom’s parallel market, Nomu, also posted gains, rising by 139.42 points, or 0.45 percent, to close at 31,275.27. In this market, 50 stocks rose while 30 saw declines. The MSCI Tadawul Index followed suit, gaining 15.52 points, or 1.05 percent, to close at 1,494.79.

Arriyadh Development Co. was the top performer of the day, with its share price soaring by 9.91 percent to SR36.05.

Other notable gainers included Saudi Research and Media Group, whose shares climbed 7.97 percent to SR189.60, and Banan Real Estate Co., which saw a 6.27 percent rise, closing at SR6.95.

On the downside, Saudi Paper Manufacturing Co. experienced the largest drop, falling 3.62 percent to SR58.50. Al-Baha Investment and Development Co. also saw a decline of 2.56 percent, with its shares ending at SR0.38.

Meanwhile, Tihama Advertising and Public Relations Co. saw a 1.84 percent decrease, closing at SR16.

Saudi Reinsurance Co. announced its annual financial results for the year ending Dec. 31.

The company reported a net profit of SR440 million for 2024, a remarkable 628 percent increase compared to 2023. This surge was primarily driven by capital gains from the sale of its stake in Probitas Holding, which amounted to SR365.9 million.

Additionally, the company’s board of directors recommended a 46.6 percent increase in capital by distributing 51.48 million bonus shares to shareholders, translating to four shares for every nine held.

The increase also includes 2.5 million shares allocated for a long-term incentive plan for employees, boosting the company’s capital by an additional 2.16 percent. Despite these strong results, Saudi Reinsurance Co. saw its share price dip by 0.53 percent, closing at SR48.10.

Najran Cement Co. also released its annual financial results for the year ending Dec. 31. The company reported a net profit of SR68.4 million for 2024, reflecting a 24.05 percent increase from 2023. This growth was driven by higher sales and improved gross margins, despite rising general and administrative expenses and finance costs. Najran Cement Co.’s stock rose by 3.34 percent, closing at SR8.75.


Saudi Arabia launches $266m program to promote eco-friendly projects

Saudi Arabia launches $266m program to promote eco-friendly projects
Updated 16 March 2025
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Saudi Arabia launches $266m program to promote eco-friendly projects

Saudi Arabia launches $266m program to promote eco-friendly projects

RIYADH: Saudi Arabia has unveiled a new environmental financing initiative worth SR1 billion ($266.6 million), supported by Riyad Bank, to encourage private sector participation in sustainable and eco-friendly projects.

Abdulrahman Al-Fadhli, Saudi Arabia’s minister of environment, water, and agriculture and chairman of the Environmental Fund’s board of directors, officially introduced the program on Sunday.

The launch coincided with the unveiling of a new digital platform for the Incentives and Grants Program, designed to foster innovation and boost environmental investments.

This initiative aligns with Saudi Arabia’s Vision 2030 objectives, which focus on promoting environmental sustainability and enhancing the quality of life.

Munir bin Fahd Al-Sahli, CEO of the Environmental Fund, emphasized that the financing program is aimed at attracting private sector investments to strengthen environmental infrastructure and meteorological services. He also noted that the program will encourage businesses across various sectors to adopt sustainable practices through innovative financial solutions.

Al-Sahli described this partnership as a major step forward in funding environmental projects, highlighting that the new platform would offer incentives and support for outstanding environmental initiatives. These efforts are part of a broader national strategy to protect the environment and foster sustainable development.

The financing program represents a significant milestone in enhancing environmental investments in the Kingdom. It provides businesses and entrepreneurs with resources and incentives to develop projects that not only improve quality of life but also contribute to sustainable environmental growth.

The new electronic platform for the Incentives and Grants Program, which was launched alongside the financing initiative, is designed to streamline the process for beneficiaries and ensure efficient execution of environmental projects. The platform aims to promote eco-friendly practices, foster innovation, and encourage investment in the environmental sector, while also ensuring regulatory compliance across various industries.

Al-Sahli reiterated the fund’s commitment to offering both financial and technical support to ensure lasting positive impacts on the environment. He urged stakeholders in the environmental sector to explore the various opportunities available through the platform.

The Incentives and Grants Program is expected to drive investment in environmental projects and improve compliance levels among institutions. It will provide grants and incentives to a broad range of entities, including small and medium-sized enterprises, corporations, research centers, universities, and nonprofit organizations.

The Environmental Fund continues to develop and implement programs focused on protecting natural resources, reducing pollution, and raising environmental awareness. Through collaborations with government and private entities, it strives to balance economic growth with environmental conservation.


Saudi Arabia’s inflation holds steady at 2% in February: GASTAT 

Saudi Arabia’s inflation holds steady at 2% in February: GASTAT 
Updated 16 March 2025
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Saudi Arabia’s inflation holds steady at 2% in February: GASTAT 

Saudi Arabia’s inflation holds steady at 2% in February: GASTAT 

RIYADH: Saudi Arabia’s inflation held firm at 2 percent year on year in February, driven largely by rising housing costs, official data showed.  

According to the General Authority for Statistics, the increase was fueled by an 8.5 percent surge in housing rents, contributing to a 7.1 percent overall rise in the housing, water, electricity, gas, and fuels category. 

The inflation rate remains consistent with Saudi Arabia’s efforts to balance economic growth with price stability as the Kingdom advances its Vision 2030 strategy, which aims to diversify the economy beyond oil.   

The government’s November 2024 budget forecast anticipated inflation to hold steady at 1.9 percent in 2025, up slightly from 1.7 percent in 2024. Meanwhile, the World Bank projected a stable 2.3 percent rate this year, below the Gulf Cooperation Council average. 

“On a monthly basis, the consumer price index in February 2025 recorded relative stability compared to January 2025, rising by 0.2 percent due to the increase of housing, water, electricity, gas, and other fuels section by 0.4 percent, driven by a 0.4 percent increase in actual housing rent prices,” said GASTAT.  

Sector breakdown 

Food and beverage prices saw a modest rise of 1 percent, largely influenced by a 3.7 percent increase in meat and poultry costs. Personal goods and services climbed 3.9 percent, bolstered by a 26.7 percent jump in jewelry prices. 

Restaurant and hotel costs edged up 0.8 percent year on year, while furniture and home equipment prices dropped 2.5 percent. Clothing and footwear prices declined 1 percent, led by a 2.4 percent drop in ready-made clothing. 

Transportation costs also dipped 1.5 percent compared to February 2024. 

On a monthly basis, consumer prices remained stable overall, with food and beverages slipping 0.2 percent. Personal goods and services rose 0.7 percent, while health and tobacco prices held steady. 

Wholesale Price Index  

In a separate report, GASTAT noted that Saudi Arabia’s Wholesale Price Index increased 1.5 percent year on year in February, driven by a 3.4 percent rise in other transportable goods prices and a 3.9 percent increase in agriculture and fishery products. 

Food products, beverages, tobacco, and textiles fell by 0.1 percent year on year, while metal products, machinery, and equipment prices dipped 0.5 percent. Ores and minerals costs dropped 1.9 percent. 

Compared to January, the WPI declined 0.5 percent, led by a 1.4 percent fall in other transportable goods prices, excluding metal products, machinery, and equipment. Food products, beverages, tobacco, and textiles also saw a marginal 0.1 percent drop, while agriculture and fishery product costs rose 1.6 percent. 


Arab region’s GDP climbs 1.8% to $3.6tn in 2024 despite challenges

Arab region’s GDP climbs 1.8% to $3.6tn in 2024 despite challenges
Updated 16 March 2025
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Arab region’s GDP climbs 1.8% to $3.6tn in 2024 despite challenges

Arab region’s GDP climbs 1.8% to $3.6tn in 2024 despite challenges

RIYADH: The Arab region’s gross domestic product increased by 1.8 percent, reaching $3.6 trillion in 2024, despite facing regional challenges, according to new data.

The report, released by the Arab Investment and Export Credit Guarantee Corporation or Dhaman, showed that growth was primarily concentrated in Saudi Arabia, the UAE, Egypt, Iraq, and Algeria, which together accounted for over 72 percent of the region’s total GDP, as reported by the Kuwait News Agency.

This aligns with Moody’s January forecast that oil production and major investment projects will drive a 0.8 percentage point increase in annual economic growth across the Middle East and North Africa in 2025.

It also corresponds with Moody’s projection of 2.9 percent growth for the region in 2025, up from 2.1 percent in 2024, while maintaining a stable outlook on the region’s sovereign credit fundamentals for the next 12 months.

The data also indicated positive outlooks for the Arab economy’s performance in 2025, with an expected growth rate of 1.4 percent.

This growth is likely to be driven by expansion in 14 Arab countries, including nine oil-producing economies that together contribute more than 78 percent of Arab GDP.

There is cautious optimism surrounding the potential reduction in regional unrest and conflicts, along with an expected improvement in revenues from oil, gas, and exports of goods and services produced by the region.

In January, Moody’s emphasized that the impact of large investments in 2025 will be most evident in Saudi Arabia, driven by significant government and sovereign wealth fund spending related to the Vision 2030 diversification program.

Moody’s also noted that the pick-up in the MENA economy will be primarily fueled by stronger growth among hydrocarbon exporters, as a result of the partial unwinding of strategic oil production cuts under the OPEC+ agreement.

According to Moody’s, real GDP growth for hydrocarbon-exporting nations is expected to rise to 3.5 percent in 2025, up from 1.9 percent in 2024. This boost will be driven by countries like Saudi Arabia, the UAE, Iraq, Kuwait, and Oman easing the oil production cuts implemented in 2023.


Oil exports propel Oman’s trade surplus to $19.4bn

Oil exports propel Oman’s trade surplus to $19.4bn
Updated 16 March 2025
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Oil exports propel Oman’s trade surplus to $19.4bn

Oil exports propel Oman’s trade surplus to $19.4bn
  • Saudi Arabia ranked second for Omani non-oil exports at 849 million rials

RIYADH: Oman’s trade surplus reached 7.5 billion Omani rials ($19.4 billion) in December, up from 7.14 billion rials in November, largely driven by the oil and gas sector, according to a new report.

Preliminary data from the National Centre for Statistics and Information indicated that the increase was primarily due to higher export revenues, especially from oil and gas, despite a rise in imports.

The total value of merchandise exports in December amounted to 24.23 billion rials, reflecting a 6.8 percent increase compared to the same period in 2023, when exports were valued at 22.69 billion rials.

The growth was predominantly attributed to a rise in oil and gas exports, which reached 16.29 billion rials, an 18.4 percent increase from 13.76 billion rials in December 2023.

Meanwhile, Oman’s merchandise imports increased by 12.1 percent year on year, reaching 16.71 billion rials in December, up from 14.91 billion rials the previous year.

Despite the increase in imports, the trade balance remained positive, supported by the robust performance of the country’s energy exports.

Within Oman’s oil and gas exports, crude oil exports totaled 9.91 billion Omani rials by the end of December, marking a 0.8 percent increase from the same period in 2023.

Refined oil exports saw a significant surge of 185.5 percent, reaching 3.85 billion rials. However, liquefied natural gas exports declined by 1.9 percent to 2.53 billion rials.

Meanwhile, non-oil merchandise exports fell by 16.3 percent to 6.23 billion rials in December, down from 7.44 billion rials the previous year.

Among these, mineral products accounted for the highest value at 1.78 billion rials, but this figure represented a 36.8 percent year-on-year drop.

Exports of base metals and their products remained stable at 1.32 billion rials, increasing slightly by 0.1 percent, while plastic and rubber product exports grew by 13.3 percent to 996 million rials.

Chemical industry exports declined by 19.6 percent to 804 million rials, and exports of live animals and animal products fell 11 percent to 350 million rials. Other exports totaled 981 million rials, a decrease of 5 percent.

Re-exports from Oman increased by 14.9 percent to 1.71 billion rials by the end of December. Within this category, re-exports of food and beverage products saw a notable 30.6 percent rise to 184 million rials, while re-exports of mineral products climbed 21.3 percent to 120 million rials.

However, re-exports of transport equipment fell by 0.6 percent to 401 million rials, and electrical machinery and equipment declined by 5.4 percent to 376 million rials. Re-exports of live animals and related products also dropped by 10.1 percent to 97 million rials.

On the import side, mineral products accounted for the largest share, totaling 4.67 billion rials, an 11.3 percent increase from December 2023.

Imports of electrical machinery and equipment surged 28.9 percent to 2.93 billion rials, while base metals and their products rose 1 percent to 1.61 billion rials.

Imports of chemical products rose 3.1 percent to 1.52 billion rials, and transport equipment imports increased by 13.5 percent to 1.52 billion rials. Other imports totaled 4.47 billion rials.

The UAE remained Oman’s top trading partner for non-oil exports, with trade value rising 11 percent year-on-year to 1.05 billion rials.

The UAE also led in re-exports from Oman, which amounted to 569 million rials, and was the top source of imports into the country, totaling 3.94 billion rials.

Saudi Arabia ranked second for Omani non-oil exports at 849 million rials, followed by India at 659 million rials.

Iran was the second-largest destination for Omani re-exports at 359 million rials, with Kuwait in third at 117 million rials.

China was the second-largest exporter to Oman, with trade valued at 1.83 billion rials, followed by Kuwait at 1.69 billion rials.

In the oil sector, total crude oil exports until the end of January stood at approximately 25.82 million barrels, with an average price of $72.5 per barrel.

Oil exports accounted for 84.3 percent of total oil production, which reached 30.61 million barrels during the same period. However, crude oil exports declined by 1.5 percent compared to January 2024, when they totaled 26.2 million barrels.

Oil production also saw a 2 percent year-on-year drop, standing at 31.24 million barrels in January.

The country’s total crude oil production fell by 2.2 percent in January to 23.39 million barrels, while condensate production reached 7.22 million barrels. The daily average oil output for January stood at 987,500 barrels.

In the banking sector, total credit provided by conventional commercial banks in Oman grew by 4.8 percent by the end of December. Private sector credit rose by 3.6 percent, reaching 20.7 billion rials.

Investment by conventional banks in securities also saw a notable increase, rising 20.5 percent to approximately 6 billion rials.

This included a 7.3 percent rise in investments in government development bonds to 2 billion rials and a 30.3 percent surge in foreign securities investments to 2.3 billion rials.

On the liabilities side, total deposits at conventional commercial banks increased by 6.2 percent to 25.1 billion rials by the end of December.

Government deposits rose by 5.3 percent to 5.3 billion rials, while public sector institution deposits grew by 11 percent to 2.5 billion rials. Private sector deposits, which made up 65.3 percent of total deposits, climbed 4.9 percent to 16.4 billion rials.