Real estate experts have attributed the ongoing rise in Saudi Arabia’s property price index, over 16 consecutive quarters, to significant and growing demand for housing units.
This trend is supported by the success of government-backed housing projects in attracting consumer interest, the evolution of financing mechanisms, and flexible credit facilities and subsidized financing programs offered by banks.
Experts predict that property price increases, particularly in major cities, will persist through the upcoming quarters of 2025 if the launch of new housing projects continues. The real estate price index saw a 3.6% year-on-year increase in the fourth quarter of 2024, marking the fastest growth since the first quarter of 2021.
According to the General Authority for Statistics’ quarterly report on property prices for the fourth quarter of 2024, the index was primarily driven by a 3.1% rise in residential property prices, a 5.0% increase in commercial property prices, and a 2.8% rise in agricultural property prices. On a quarterly basis, the property price index rose by 1.6% in the fourth quarter compared to the third quarter, with residential property prices increasing by 1.0%, commercial prices by 2.7%, and agricultural property prices by a significant 9.8%.
In remarks to Asharq Al-Awsat, Khaled Al-Mobid, CEO of Menassat Realty Co., attributed the price surge to heightened demand for housing units and the success of government-subsidized housing projects, which have attracted significant consumer interest. He noted that these factors have boosted property prices, especially in neighborhoods hosting large housing projects such as those in eastern and western Riyadh.
Previously low-priced properties in these suburban areas have experienced sharp price hikes due to increased demand. Al-Mubid believes that if the momentum of housing projects continues in major cities, coupled with strong consumer purchasing power and ongoing growth in the real estate sector, property prices will likely continue to rise through mid-2025, or at the very least, stabilize without declining.
Abdullah Al-Mousa, a real estate expert and marketer, told Asharq Al-Awsat that the sustained rise in property prices is linked to economic and investment growth driven by Saudi Arabia’s Vision 2030 initiatives.
He pointed out that large-scale investments in infrastructure and city development, particularly in major cities like Riyadh and Jeddah, have boosted demand for real estate.
Mega projects such as Qiddiya and developments in entertainment and hospitality have also increased the value of surrounding areas and attracted interest from buyers and investors.
Al-Mousa highlighted that population growth, combined with government initiatives like the “Sakani” program, rising income levels, and stronger purchasing power, have intensified demand for residential properties. Families are increasingly seeking larger spaces and greater privacy, leading to a shift in demand toward villas and spacious apartments.
The evolution of financing mechanisms, including flexible credit facilities and subsidized loan programs, has improved homeownership accessibility. Al-Mousa noted that lower global interest rates have made borrowing more attractive, accelerating purchasing decisions and increasing activity in the real estate market. The expansion of luxury housing projects and developments targeting middle- and high-income families has further driven competitiveness and property price growth.
Real estate marketer Saqr Al-Zahrani noted that Saudi property prices have shown a marked acceleration in the fourth quarter of 2024. He attributed the rise in the general index to the complex interplay of supply and demand dynamics in the market, supported by Saudi Arabia’s recent economic and structural transformations and the influence of foreign investments.
