Population Growth Drives Saudi Real Estate Prices to 15th Consecutive Increase

A residential project of the Ministry of Municipalities and Housing (Asharq Al-Awsat)
A residential project of the Ministry of Municipalities and Housing (Asharq Al-Awsat)
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Population Growth Drives Saudi Real Estate Prices to 15th Consecutive Increase

A residential project of the Ministry of Municipalities and Housing (Asharq Al-Awsat)
A residential project of the Ministry of Municipalities and Housing (Asharq Al-Awsat)

Real estate prices in Saudi Arabia have continued their upward trajectory for the fifteenth consecutive quarter since early 2021. In the third quarter of this year, data shows a 2.6% year-on-year increase, driven by a 1.6% rise in residential property prices and a 6.4% increase in commercial properties, while agricultural land prices declined by 8.7%.
According to the General Authority for Statistics (GASTAT), Riyadh recorded the highest property price increase among Saudi regions in the third quarter, with a year-on-year rise of 10.2%, followed by Hail at 5%. In contrast, prices fell in nine administrative regions, with Al-Baha experiencing the steepest decline at 14.3%.
These latest figures are based on an updated methodology from the GASTAT, which uses 2023 as the new base year and incorporates a geographic AI model to better capture transaction types. Satellite images are also used to enhance data quality and accuracy. Methodological updates include broader geographic coverage to better represent administrative regions and revised property classifications, which were applied retroactively to data from 2021 onward.
Real estate experts told Asharq Al-Awsat that the steady rise in property prices since early 2021 reflects high demand for residential properties, fueled by sustained growth and government efforts to encourage homeownership under Vision 2030, which aims to increase homeownership rates among Saudi families to 70%.
Real estate expert Saqr Al-Zahrani explained that the price increase reflects rising demand for residential and commercial properties across Saudi cities and provinces, due to ongoing population growth, urban expansion, and more housing projects aimed at meeting high demand. Government efforts to support and expand residential projects have also played a significant role.
Al-Zahrani expects a slight continued increase in residential property prices in the fourth quarter of 2024, especially with the expansion of housing projects aimed at boosting homeownership in most cities. However, he anticipates this growth rate may moderate somewhat in 2025 if new regulatory measures, financing programs, or incentives are introduced to adjust demand.
In remarks to Asharq Al-Awsat, real estate expert Al-Aboudi bin Abdullah attributed the 2.6% increase in Saudi real estate prices in the third quarter this year, compared to the same period last year, to two main factors. First, residential property prices rose by 1.6%, driven by heightened developer demand in anticipation of further price increases and market activity, as interest rates are expected to remain low into 2025.
The second factor is the 6.4% rise in commercial property prices, spurred by demand for land and commercial and office projects. This demand aligns with major development projects launched under Saudi Arabia’s Vision 2030.

 

 



ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
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ECB's Lagarde Renews Integration Call as Trade War Looms

FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo
FILE PHOTO: European Central Bank President Christine Lagarde and Governor of the Bank of Finland Olli Rehn arrive at the non-monetary policy meeting of the ECB's Governing Council in Inari, Finnish Lapland, Finland February 22, 2023. Lehtikuva/Tarmo Lehtosalo via REUTERS//File Photo

European Central Bank President Christine Lagarde renewed her call for economic integration across Europe on Friday, arguing that intensifying global trade tensions and a growing technology gap with the United States create fresh urgency for action.
US President-elect Donald Trump has promised to impose tariffs on most if not all imports and said Europe would pay a heavy price for having run a large trade surplus with the US for decades.
"The geopolitical environment has also become less favorable, with growing threats to free trade from all corners of the world," Lagarde said in a speech, without directly referring to Trump.
"The urgency to integrate our capital markets has risen."
While Europe has made some progress, EU members tend to water down most proposals to protect vested national interests to the detriment of the bloc as a whole, Reuters quoted Lagarde as saying.
But this is taking hundreds of billions if not trillions of euros out of the economy as households are holding 11.5 trillion euros in cash and deposits, and much of this is not making its way to the firms that need the funding.
"If EU households were to align their deposit-to-financial assets ratio with that of US households, a stock of up to 8 trillion euros could be redirected into long-term, market-based investments – or a flow of around 350 billion euros annually," Lagarde said.
When the cash actually enters the capital market, it often stays within national borders or leaves for the US in hope of better returns, Lagarde added.
Europe therefore needs to reduce the cost of investing in capital markets and must make the regulatory regime easier for cash to flow to places where it is needed the most.
A solution might be to create an EU-wide regulatory regime on top of the 27 national rules and certain issuers could then opt into this framework.
"To bypass the cumbersome process of regulatory harmonization, we could envisage a 28th regime for issuers of securities," Lagarde said. "They would benefit from a unified corporate and securities law, facilitating cross-border placement, holding and settlement."
Still, that would not solve the problem that few innovative companies set up shop in Europe, partly due to the lack of funding. So Europe must make it easier for investment to flow into venture capital and for banks to fund startups, she said.