More than two weeks after US President Donald Trump imposed a 10% tariff on imports from Gulf Cooperation Council (GCC) countries—part of a broader global tariff initiative—questions have emerged regarding its potential impact on Saudi Arabia’s real estate sector.
As a cornerstone of the Kingdom’s economic diversification under Vision 2030, the real estate market remains a vital contributor to sustainable growth.
Real estate and economic experts predict the new tariffs will have a “moderate” and “limited” effect on Saudi Arabia’s property market. Speaking to Asharq Al-Awsat, they estimated a potential rise of 2–5% in the cost of imported construction materials used in infrastructure and development projects.
The Saudi real estate sector recorded transactions worth approximately SAR 2.5 trillion (around $666 billion) in 2024, buoyed by Vision 2030 initiatives and government incentives—reinforcing investor confidence in the sector as a stable and attractive investment hub, particularly amid global financial volatility.
Mohammed Hamdi Omar, CEO of G.World, told Asharq Al-Awsat that the new tariffs could increase the cost of importing steel, concrete, and aluminum by 3.4% to 7%, contributing to an overall rise in construction costs of up to 5% annually. This is driven by increasing demand across numerous development projects currently underway or planned across the Kingdom.
Omar noted that Saudi Arabia had previously raised tariffs on many construction materials in 2020, with duties on items like steel, aluminum, and machinery increasing from 5–12% to as much as 15%.
He added that higher input costs could add $10–$20 per ton to steel prices, which accounts for around 20% of building material inputs, while concrete prices may rise 5–10% due to energy and logistics cost hikes.
These rising costs, Omar warned, could force some developers to delay or cancel low-margin projects, potentially exacerbating the existing housing shortage in the Kingdom.
Despite global economic fluctuations, Saudi Arabia’s non-oil GDP growth and ongoing reforms continue to strengthen investor sentiment. Government incentives, such as VAT exemptions for first-time homebuyers, also contribute to the sector’s resilience.
Real estate appraiser and expert Eng. Ahmed Al-Faqih added that the Saudi market relies more on Chinese imports for construction materials, which should shield many development projects from the brunt of US tariffs.
He emphasized that, like gold, real estate remains a safe haven for capital, especially as global financial markets face disruption amid tariff wars.
Luxury real estate is expected to bear the brunt of price increases, though it continues to expand in line with Vision 2030 and growing interest from tourists and foreign investors.
