High Demand, Lower Interest Rates Boost Growth in Saudi Arabia’s Real Estate Transactions

Riyadh accounts for about 60% of total real estate deals (Reuters)
Riyadh accounts for about 60% of total real estate deals (Reuters)
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High Demand, Lower Interest Rates Boost Growth in Saudi Arabia’s Real Estate Transactions

Riyadh accounts for about 60% of total real estate deals (Reuters)
Riyadh accounts for about 60% of total real estate deals (Reuters)

High demand for residential units in Saudi Arabia’s major cities, along with a recovery in the real estate market driven by lower interest rates, has boosted the total value of real estate transactions in the Kingdom to $50 billion (SAR 188 billion) during the first nine months of 2024. This marks a 35% increase compared to the same period last year, according to real estate experts who expect this growth to continue in the next quarter and in the coming years.

Data from the Saudi Ministry of Justice revealed that over 162,000 real estate transactions were recorded during this period, with the residential sector accounting for about 86% of the total. The commercial sector made up around 10% of the transactions. The Riyadh region led the way with approximately 60% of the total transactions, valued at $27 billion (SAR 101 billion), followed by the Makkah region with 19%, valued at $11.8 billion (SAR 44.3 billion).

Investor Confidence

In remarks to Asharq Al-Awsat, real estate expert and appraiser Eng. Ahmed Al-Faqih highlighted that the growth in real estate transactions reflects the strong confidence of investors and stakeholders in the resilience and attractiveness of the Saudi real estate market. He noted that this was particularly evident in Riyadh, which accounted for half of the total real estate activity over the past nine months, driven by the government’s launch of several large-scale projects in the capital.

Al-Faqih added that the real estate market’s growth is aligned with the broader investment activity in the country. This growth is supported by increased regulations, governance, and transparency, which have propelled Saudi Arabia to rank 12th globally in the Real Estate Transparency Index, placing it among the top 40 international markets in terms of transparency.

A report from global real estate consultancy Knight Frank noted that the total value of Saudi Arabia’s Vision 2030 projects launched in the past eight years has reached $1.3 trillion.

Supply and Demand

For his part, real estate expert Saqr Al-Zahrani told Asharq Al-Awsat that supply and demand are the primary drivers of the real estate market in Saudi Arabia. He anticipates that a gradual reduction in interest rates will stimulate real estate demand in the fourth quarter of 2024 by lowering financing costs, encouraging both investors and buyers to capitalize on the opportunity.

Al-Zahrani attributed the growth in real estate transactions in Riyadh to its position as a key destination for internal migration and investment opportunities, driven by infrastructure projects and a growing population, which continue to boost demand for both residential and commercial properties in Riyadh and nearby areas.

He also highlighted that regional conflicts and Saudi Arabia’s stable strategic position have increased the Kingdom’s appeal in the real estate market.

Looking ahead to the fourth quarter of 2024, Al-Zahrani expects continued growth in real estate transactions due to three key factors: the seasonal rise in demand in Makkah during Umrah and Hajj, the increase in residential and commercial projects in Riyadh alongside significant infrastructure investments, and the easing of financing restrictions with lower interest rates.

Al-Zahrani identified six factors that will drive long-term growth in Saudi Arabia’s real estate market: large infrastructure projects improving the quality of life, growing demand for housing due to population growth and internal migration, regulatory reforms facilitating property ownership and investment, increased foreign investment driven by political stability, diverse financing options such as investment funds and crowdfunding platforms, and Saudi Arabia’s stable political climate compared to neighboring countries, boosting investor confidence.



Saudi Arabia Allows Contracting Exceptions for Firms without Regional HQ

The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
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Saudi Arabia Allows Contracting Exceptions for Firms without Regional HQ

The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)
The King Abdullah Financial District in Riyadh (Asharq Al-Awsat)

Saudi Arabia has introduced greater flexibility into its investment environment, allowing government entities, under strict controls to safeguard spending efficiency and ensure the delivery of critical projects, to seek exceptions to contract with international companies that do not have regional headquarters in the kingdom.

The Local Content and Government Procurement Authority notified all government bodies of the mechanism to apply for exemptions through the Etimad digital platform.

The step is designed to balance enforcement of the “regional headquarters relocation” decision, in force since early 2024, with the needs of technically specialized projects or those driven by intense price competition.

Under a government decision that took effect at the start of 2024, state entities, including authorities, institutions and government-affiliated funds, are barred from contracting with any foreign commercial company whose regional headquarters in the region is located outside Saudi Arabia.

According to the information, the Local Content and Government Procurement Authority informed all entities of the rules governing contracts with companies that lack a regional headquarters in the kingdom and related parties.

Government entities may request an exemption from the committee for specific projects, multiple projects or a defined time period, provided the application is submitted before launching a tender or initiating direct contracting procedures.

Submission mechanism

In two circulars, the authority detailed how to submit exemption requests and clarified the cases in which contracting is permitted under the controls. It said the exemption service was launched on the Etimad platform in November 2025.

The service is available to entities that float tenders through Etimad. Requests for tenders launched before the service went live, as well as those issued outside the platform, will continue to follow the previously adopted process.

Etimad is the kingdom’s official financial services portal run by the Ministry of Finance, aimed at driving digital transformation of government procedures and boosting transparency and efficiency in managing budgets, contracts, payments, tenders and procurement. The platform streamlines transactions between state entities and the private sector.

Technical criteria

When issuing the contracting controls, the government made clear that companies without a regional headquarters in Saudi Arabia, or related parties, are not barred from bidding for public tenders.

However, their offers can only be accepted in two cases: if there is no more than one technically compliant bid, or if the offer ranks among the best technically and is at least 25% lower in price than the second-best bid after overall evaluation.

Contracts with an estimated value of no more than 1 million riyals ($266,000) are also exempt. The minister may, in the public interest, amend the threshold, cancel the exemption or suspend it temporarily.

More than 700 headquarters

More than 700 multinational companies had relocated their regional headquarters to Riyadh by early 2026, exceeding the initial target of attracting 500 companies by 2030. The program seeks to cement the kingdom’s position as a regional business hub and to localize global expertise.

When announcing the contracting ban, Saudi Arabia said the move was intended to incentivize foreign firms dealing with the government and its affiliated entities to adjust their operations.

It aims to create jobs, curb economic leakage, raise spending efficiency and ensure that key goods and services procured by government entities are delivered inside the kingdom with appropriate local content.

The government said the policy aligns with the objectives of the Riyadh 2030 strategy unveiled during the recent Future Investment Initiative forum, where 24 multinational companies announced plans to move their regional headquarters to the Saudi capital.

It stressed that the decision does not affect any investor’s ability to enter the Saudi economy or continue working with the private sector.

 


IMF Board to Review Staff-level $8.1 Bln Agreement for Ukraine

The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
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IMF Board to Review Staff-level $8.1 Bln Agreement for Ukraine

The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko
The city's downtown on a frosty winter day, amid Russia's attack on Ukraine, in Kyiv, Ukraine February 19, 2026. REUTERS/Alina Smutko

The International Monetary Fund on Thursday said its board ​would review a staff-level agreement for a new $8.1 billion lending program for Ukraine in coming days.

IMF spokeswoman Jule Kozack told reporters that Ukrainian authorities had completed the prior actions needed to move forward with the request ⁠of a new ⁠IMF program, including submission of a draft law on the labor code and adoption of a budget.

She said Ukraine's economic growth in 2025 ⁠was likely under 2%. After four years of war, the country's economy had settled into a slower growth path with larger fiscal and current account balances, she said, noting that the IMF continues to monitor the situation closely.

"Russia's invasion continues to take a ⁠heavy ⁠toll on Ukraine's people and its economy," Kozack said. Intensified aerial attacks by Russia had damaged critical energy and logistics infrastructure, causing disruptions to economic activity, Reuters quoted her as saying.

As of January, she said, 5 million Ukrainian refugees remained in Europe and 3.7 million Ukrainians were displaced inside the country.


US Stocks Fall as Iran Angst Lifts Oil Prices

A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
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US Stocks Fall as Iran Angst Lifts Oil Prices

A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid
A screen displays a stock chart at a work station on the floor of the New York Stock Exchange (NYSE) in New York City, US, April 6, 2022. REUTERS/Brendan McDermid

Wall Street stocks retreated early Thursday as worries over US-Iran tensions lifted oil prices while markets digested mixed results from Walmart.

US oil futures rose to a six-month high as Iran's atomic energy chief Mohammad Eslami said no country can deprive the Islamic republic of its right to nuclear enrichment, after US President Donald Trump again hinted at military action following talks in Geneva.

"We'd call this an undercurrent of concern that is bubbling up in oil prices," Briefing.com analyst Patrick O'Hare said of the "geopolitical angst."

About 10 minutes into trading, the Dow Jones Industrial Average was down 0.6 percent at 49,379.46, AFP reported.

The broad-based S&P 500 fell 0.5 percent to 6,849.35, while the tech-rich Nasdaq Composite Index declined 0.6 percent to 22,621.38.

Among individual companies, Walmart rose 1.7 percent after reporting solid results but offering forecasts that missed analyst expectations.

Shares of the retail giant initially fell, but pushed higher after Walmart executives talked up artificial intelligence investments on a conference call with analysts.

The US trade deficit in goods expanded to a new record in 2025, government data showed, despite sweeping tariffs that Trump imposed during his first year back in the White House.