As geopolitical turmoil redraws the regional investment map, Saudi Arabia is emerging as a “fortress of stability” and a safe haven for capital.
Experts told Asharq Al-Awsat the Kingdom’s real estate sector has been the biggest winner, posting exceptional growth of 20% to 30%.
They said the surge is no coincidence, but the result of strong financial buffers and ambitious structural programs under Vision 2030, which have proved effective in absorbing external shocks and turning regional challenges into sustained growth.
In an economic paradox, the current regional conflict has underscored Saudi Arabia’s appeal as an investment destination, backed by flexible government programs that adapt to shifting conditions.
The impact has been clear in real estate. The sector has benefited from an influx of residents and investors from crisis-hit countries, driving a sharp rise in occupancy across residential and hotel units, and increasing flows of travelers and economic activity into the Kingdom.
Despite pressure on global energy markets, commodities and supply chains, Saudi real estate has moved in the opposite direction, with a clear positive effect. Rental returns across the Kingdom jumped by an average of 20% to 30%, driven by immediate and rising demand.
The trend highlights the Saudi economy’s ability to offer a stable and rewarding investment environment, even in difficult regional and global conditions.
Positive impact
Saudi investor Mohammed Al-Murshid, a member of the Riyadh Chamber of Commerce and Industry and former head of its real estate committee, said the fallout from the current war had a clear short-term positive impact on demand, especially rents in major cities including Riyadh, Jeddah and the Eastern Province.
He said the war was not the main driver, but reinforced an existing trend.
Al-Murshid told Asharq Al-Awsat the effect stemmed from shifts in population movement in countries more directly affected by the conflict. Flight disruptions and partial airspace closures in the Gulf pushed travelers and residents toward Saudi Arabia as a relatively more stable hub.
In some cases, people moved by land to Riyadh as a safe transit point. This created immediate demand for short-term rentals and hotels, put temporary pressure on furnished units, and lifted corporate demand.
“In times of regional instability, companies tend to relocate employees to safer environments and strengthen their presence in more stable economies,” Al-Murshid said.
He said Saudi Arabia benefited from its economic weight and relative security and stability compared with some regional hotspots.
Global inflation has also fed into the market. Higher energy prices, shipping and insurance costs linked to the war have pushed up construction costs.
Global estimates suggest these factors raised property prices by 15% to 20%, reflecting the market’s exposure to supply chain pressures.
Al-Murshid said the war boosted Saudi real estate by 20% to 30%, citing the ability of Vision 2030 programs to absorb shocks, alongside population growth among citizens and residents that continues to drive domestic demand.
Saudi real estate is the biggest winner
Dr. Abdul Rahman Baashen, head of the Al Shorouk Center for Economic Studies, echoed that view, saying the sector has emerged as a leading beneficiary of current geopolitical shifts.
He said the “key” lies in resilient local demand, which has continued to grow on the back of domestic factors despite disruption elsewhere in the region.
Baashen pointed to a key paradox. While global oil supply volumes fell due to the near-total closure of the Strait of Hormuz, the surge in crude prices offset the drop in exports.
The rise in value boosted state revenues, helping sustain government spending on major real estate and infrastructure projects, a core support for the market.
Three drivers
Baashen identified three factors driving momentum:
A temporary surge in demand, fueled by the movement of people and companies seeking stability.
A rise in prices, driven by higher global construction and logistics costs.
A stronger strategic position for Saudi Arabia as a regional investment haven.
He said Saudi real estate is now in a state of “smart balance,” supported by strong domestic demand and additional external demand linked to regional crises.
This mix gives the sector flexibility to adapt to current conditions in the short- and medium-term, while keeping it closely tied to the strength of the Saudi economy.
Reinforcing Saudi Arabia’s position
Baashen and Al-Murshid agreed that the crisis has reinforced Saudi Arabia’s status as a regional investment haven.
They said three forces are shaping that position: strong demand driven by a move toward stability, rising prices in line with global costs, and growing international confidence in the Saudi economy.
They said the sector now rests on solid domestic demand, with added support from external demand linked to regional shifts, sustaining its appeal and performance in the short and medium term.
