Staff Report
Dubai, UAE
Saudi Arabia saw a 50 percent annual uptick in residential transactions, recording US$31.45 billion in 2024 across Riyadh, Jeddah, and Dammam Metropolitan Area (DMA), Deloitte revealed in its latest real estate market review. The market is set to experience robust growth through 2025, fuelled by the Kingdom’s Vision 2030 reform agenda and commitment to economic diversification. Key developments, including major events like Expo 2030 and the FIFA World Cup 2034, alongside giga-projects such as NEOM, the Red Sea, and Qiddiya, will further drive economic boon.
The inflow of foreign direct investment (FDI) into the country is thought to bolster real estate growth. The National Investment Strategy anticipates FDI values to reach US$103. 4 billion by 2030, exhibiting a compound annual growth rate (CAGR) of 22 percent from US$25.5 billion in 2023.
Oliver Morgan, Partner and Head of Real Estate at Deloitte Middle East, commented, “Saudi Arabia’s real estate sector is experiencing robust growth, driven by strategic government initiatives, strong economic fundamentals, substantial infrastructure investments and expanding international trade. These diverse growth drivers position Saudi Arabia as one of the region’s most dynamic and promising real estate markets. Sustainable and smart developments, increasing demand for luxury and mixed-use properties, and a growing focus on affordable housing to serve the Kingdom’s expanding population have caused residential transactions to rise steadily. Riyadh continues to solidify its position as the primary business hub, attracting significant foreign investment.”
The total number of residential transactions in KSA’s major hotspots like Riyadh, Jeddah, and DMA reached 102,522 in 2024, accumulating a value of US$31.45 billion. Deloitte’s report found that sales grew in Riyadh by 5 percent for apartments and 12 percent for villas. Around 69 percent of apartments sold were priced between US$66,000 to US$266,000, primarily targeting the low to mid-income segments. Jeddah and DMA posted sales growth of 1 percent for apartments the past year.
In the office market, Deloitte reported that Grade A office-focused sectors experienced a growth of 5.3 percent between 2023 and 2024. The growth was underpinned by Saudi’s US$786 billion GDP in 2024 that is predicted to grow to US$981 billion by 2030 at a cumulative average growth rate (CAGR) of 3.4 percent.
Progress is visible in the Kingdom, especially as mega projects like New Murabba and Diriyah Gate commenced construction. King Abdullah Financial District (KAFD) in Riyadh delivered a significant number of offices. In Jeddah, an additional 150,000 square metres of gross leasable area (GLA) was delivered encompassing projects like JCDC and Darb Al Haramain. The Regional Headquarters Program, launched in Q1 2024, resulted in 571 companies relocating to Riyadh by the end of the year.
Boosted by the Kingdom’s Vision 2030 agenda, the hospitality sector continued to shine in 2024, seeing significant launches of hotels and resorts. The country surpassed the Vision 2030 milestone of 100 million tourists a year, seven years ahead of schedule. The record numbers pushed up the Average Daily Rate (ADR) from SAR 702 in 2023 to SAR 716 in 2024.
Riyadh, specifically, has outperformed global cities like Hong Kong, Madrid and Dubai, with ADR climbing to SAR 895 in 2024. This surge has been attributed to the ongoing strength of corporate and leisure demand and the successful Riyadh Seasons event, which stimulated domestic and international tourist inflows.
Jeddah’s market remains a critical tourism gateway. The coastal city’s ADR stood at SAR 680, and new developments along the waterfront are expected to strengthen market performance as tourism initiatives ramp up ahead of global events like Expo 2030 and FIFA World Cup 2034.
Furthermore, new attractions such as AlUla and the New Murabba, NEOM and Amaala are poised to drive the sector’s growth in the long run.
The logistics sector experienced an impetus from various initiatives and incentives deployed as part of Vision 2030, including the National Industrial Development and Logistics program, Special Economic Zones such as Riyadh Integrated Logistics Zone, Saudi Port Authority initiatives enhancing port infrastructure in Jeddah & DMA, and the Vision 2030 logistics master plan. Deloitte reported that as per the Saudi Port Authority, cargo figures increased by 14 percent annually in 2024.
Ends
Also read: KSA leads in MENA with US$1.5 trillion project pipeline
