Saudi Arabia's residential supply seen to reach 3.9M units by 2028: Knight Frank
"Based on our analysis, this figure is projected to reach nearly 3.9 million units by the end of 2028, reflecting the government's ongoing efforts to enhance housing availability," it noted.
To achieve this, government initiatives to increase housing supply within the low to mid-market segments, as well as programs such as Wafi and Sakani, have been pivotal in boosting home ownership among Saudi nationals. In fact, the Saudi home ownership rate reached 63.7% at the end of 2023.
During 2024, the total number of real estate transactions across all asset classes in Saudi Arabia surged by 37% to just over 236,690 deals, while the total value of all deals grew by 27% to SAR 267.8 billion.
According to the report, 88% of Saudis prefer purchasing real estate units over renting, while 60% of expatriates with a monthly income exceeding SAR 30,000 also favor buying property.
Prices of residential units in Riyadh hit record levels, with apartment prices leaping 75% compared with 2019, reaching SAR 5,780 per square meter. Villa prices rose 40% to SAR 5,190 per square meter.
The growing population, coupled with increasing urban migration and ongoing government housing initiatives to achieve 70% home ownership by the end of the decade, is supercharging housing demand, Knight Frank said.
"Our estimates show that the city will need 305,000 new homes over the next 10 years to house Saudi nationals alone," it noted, expecting the addition of 330,000 new hotel rooms by 2030.
The rising demand for housing in the capital has sustained growth in home values, with apartment prices climbing 10.6% during 2024, while villa prices grew by 6.3% over the same period.
In 2024, the housing market in Jeddah experienced the most pronounced growth in transactions compared to other major cities. Residential sales swelled by 53%, increasing from 18,303 deals in 2023 to 28,072 deals in 2024. The total value of residential transactions increased by 43% over the same period.
Despite the rise in demand, apartment prices increased marginally by 3.1% over the last 12 months, reaching SAR 4,215 per square meter by the end of Q4 2024. Meanwhile, villa prices declined by 1.7% to SAR 5,000.
In 2024, residential transactions in the Dammam metropolitan area (DMA) - Dammam, Dhahran, and Al-Khobar - leapt by 49%, reaching 11,275 deals compared to 7,571 in 2023. The total value of these transactions climbed by 44%, growing to SAR 13.5 billion over the same period.
The boom in transaction activity has led to a notable increase in residential prices across the Dammam metropolitan area. Apartment prices rose by 6.2%, reaching an average of SAR 3,743 per square meter. Villa prices experienced a modest year-on-year increase of 2.7%, with average prices settling at SAR 3,530.
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