Three Factors Contributed to Saudi Real Estate Market’s Solidity in 2023

The real estate market is likely to grow in 2024 until it reaches $100 billion in 2030. (SPA)

The Saudi real estate market recorded deals with a total value of about SAR 277 billion ($74 billion), compared to SAR 223.5 billion in 2022.
Market statistics also showed that the size of the transaction area was about one billion square meters for both the years 2023 and 2022, while the number of real estate transactions declined by 20 percent from 325,000 to 260,000, along with a significant decrease in real estate deals in neighborhoods outside and on the outskirts of cities, specifically in the city of Riyadh.
Although the region’s economies are affected by several factors - including the continued increase of interest rates at a rapid pace, the impact of global supply chains due to geopolitical conflicts, and the rise in global inflation and its impact on the prices of raw materials - the effect of these factors on the Saudi real estate market remained limited during the past year.
In remarks to Asharq Al-Awsat, economic and real estate analysts attributed the market’s solidity and its maintenance of annual levels above SAR 200 billion to three main factors, in addition to the entry of a number of international companies into the real estate market and their search for new regional headquarters in Saudi Arabia.
In this context, Khaled Al-Mobid, CEO of Menassat Reality Company – a Riyadh-based real estate developer – said that three factors contributed to the cohesion of the real estate market in 2023. Those include expectations for the positive growth of the Saudi economy, the local and global confidence it enjoys, and the large and growing demand for real estate in major cities and business centers, specifically in Riyadh.
In addition, Al-Mobid pointed to Riyadh’s winning of the hosting of Expo 2030 and two important football tournaments, the Asia Cup 2027 and the World Cup 2034.
He explained that the performance of the Saudi real estate market in 2023 was very positive and contradicted many of the expectations of a number of analysts and real estate experts who projected that the market would be affected by high inflation and real estate prices, which would impact the consumers’ purchasing power.
Al-Mobid said that the market performance may continue in a balanced manner in 2024, while maintaining previous gains, adding that the market faces great challenges represented by the rise in interest rates, as well as the prices of building materials, and the high costs of construction and land.
For his part, economic expert and head of the International Center for Strategic Studies, Dr. Khaled Ramadan, told Asharq Al-Awsat that the real estate market was likely to grow during 2024, noting that its size would reach $100 billion by 2030.
The sector performance is supported by the ongoing movement to accelerate the construction of housing projects, the growth of the tourism-related hospitality market, and the development of infrastructure in preparation for hosting the Riyadh exhibition Expo 2030, Ramadan remarked.
​He added that he expects the growth momentum to continue during the current year, thanks to improved consumer income, increased demand for family and commercial housing, and the entry of more international companies searching for new regional headquarters.
Ramadan described the performance of the Saudi real estate market during 2023 as “good,” thanks to the strong demand, which raised real estate prices in some major cities, specifically in Riyadh and Jeddah, by 7 percent at the end of the third quarter. He noted that this momentum has increased the size of the real estate market to $74 billion in 2023.