Saudi Arabia construction output hits $148bn in first half 2024, up 4.6% year-on-year
The figures, released in Knight Frank's Saudi Arabia Construction Landscape Review, show construction in the Kingdom has grown year-on-year since 2020.
The global property consultancy forecasts this trend will continue, with construction output projected to reach $191 billion by 2029.
The development surge stems from the government's Vision 2030 strategy, which aims to position Saudi Arabia as a global hub for tourism, commerce and trade.
The transformation plan targets delivery of over 1 million homes, more than 362,000 hotel keys, over 7.4 million square metres of retail space, and more than 7.7 million square metres of office space by the end of the decade.
Faisal Durrani, Partner – Head of Research, MENA, said: 'Construction contracts totalling more than $215.4 billion were awarded across Saudi Arabia between 2020 and 2025, highlighting the government's incredible ambition and commitment to making the Kingdom the centre of wealth generation and trade not just in the GCC but globally. Indeed, some $1.3 trillion is planned to be invested in real estate and infrastructure projects as part of Vision 2030, highlighting the breadth and scale of what is now being delivered.'
Riyadh leads Saudi Arabia's construction surge
Riyadh remains the focal point of construction activity, with $135.2 billion of contracts awarded since 2020, accounting for 63 per cent of the Kingdom's total.
The capital's $195 billion development plan encompasses 4.6 million square metres of office space, 2.6 million square metres of retail, more than 28,800 hotel rooms and over 340,000 homes.
Transport infrastructure represents a priority area, with almost $24 million – 29 per cent of construction contracts awarded in Riyadh – allocated to transport projects.
The $22.5 billion Riyadh Metro project features six lines spanning 176 kilometres with 85 stations and fully automated, driverless trains.
The King Abdulaziz Public Transport Project will establish a bus rapid transport system, while more than $5 billion is being invested in major road projects to support the city's expansion.
Mohamed Nabil, Regional Partner – Head of Project and Development Services, MENA, added: 'With the population of Riyadh projected to increase to 10 million by 2030, the city's transport upgrade programme is one of the largest and most innovative in the world. Although the car is still the dominant form of transport, the investments being made in Riyadh's Metro and rapid transport system show how the city is redefining the urban experience through sustainable development to create not only a liveable city, but also an attractive destination for business and tourism.'
'Although the car is still the dominant form of transport, the investments being made in Riyadh's Metro and rapid transport system show how the city is redefining the urban experience through sustainable development to create not only a liveable city, but also an attractive destination for business and tourism.'
Giga projects drive construction activity across the Kingdom, according to Amar Hussain, Associate Partner – Research, Middle East.
The $50 billion New Murabba project will transform 19 square kilometres of northwest Riyadh, creating 18 new neighbourhoods.
In Western Saudi Arabia, a $685.5 billion real estate development plan centred on giga projects will deliver more than 382,000 homes, 330,000 hotel rooms, and office and retail space spanning upwards of 7.3 million square metres.
'These projects are designed on a scale far beyond anything else currently under construction in EMEA, and this bold vision is rapidly becoming reality, bringing benefits to Saudi residents and businesses alike,' he added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The National
2 hours ago
- The National
Dubai rents to ease after handover of 72,000 homes this year
The handover of more than 72,000 homes this year is expected to stabilise rents in Dubai, reducing pressure on tenants and offering them more choice, according to a new report by property portals Bayut and dubizzle. The market is entering a phase of 'healthy stabilisation', with long-term rents showing more measured shifts and short-term rentals continuing to attract steady demand, the research found. ' Dubai's rental market is starting to stabilise after a period of rapid growth,' said Haider Ali Khan, chief executive of Bayut and Dubizzle Group Mena. 'With over 72,000 new units expected this year, the pressure on rents is slowly starting to ease, offering more breathing room and better choices for tenants.' 'With the rent-versus-buy debate picking up, especially now that prices are levelling out, we're seeing more people take a serious look at home ownership. 'The first-time homebuyer initiative launched by the Dubai Land Department is also nudging renters to consider making that leap, offering access to exclusive units and attractive financing.' Dubai's property market has benefited from government initiatives such as residency permits for retired and remote workers, expansion of the 10-year golden visa programme and overall growth in the UAE's economy on diversification efforts. Under the first-time homebuyer initiative, purchasers will have priority access to new homes from participating developers as well as existing inventory. They will also benefit from discounts or limited-time offers on the price of off-plan units, flexible payment plans and improved mortgage options with better interest rates, faster approval times and reduced fees, according to the DLD. Watch: What is Dubai's first-time home ownership scheme? Apartment rents Affordable apartment rents increased by 7 per cent in the first half of the year, but some units in Bur Dubai and Deira reported decreases of 6.19 per cent, the Bayut-dubizzle report found. Mid-range apartment rentals experienced rises of 1 per cent to 6 per cent in annual rates. Asking rents for luxury apartments decreased between 1 per cent and 5 per cent. However, some units in Dubai Marina and Downtown Dubai reported an increase of up to 3 per cent in annual rent. Bur Dubai, Arjan and Deira are popular for affordable apartment rentals. Jumeirah Village Circle, Business Bay and Jumeirah Lakes Towers are sought-after for mid-tier units, while Dubai Marina, Downtown Dubai and Dubai Creek Harbour maintained their status as prime choices for luxury apartments, the study showed. Villa rents Affordable villa rents surged by up to 9 per cent in some districts. Asking rents for mid-tier villas have generally risen by up to 7 per cent. The exceptions are three and four-bedroom units in Al Furjan, and four and five-bedroom units in JVC, which recorded rent decreases of up to 13 per cent, according to the report. Luxury villa rents surged by up to 53 per cent in the first six months of the year, with five-bedroom units in Dubai Hills Estate reporting the highest rises following the influx of new inventory. 'Continued demand and lack of extensive supply has meant that villa rentals have remained competitive for landlords,' the report said. While Damac Hills 2, Mirdif and Dubai South were preferred for affordable villa rents, Al Furjan, JVC and Arabian Ranches 3 attracted the most tenant interest in the mid-tier segment. Dubai Hills Estate, Damac Hills and Jumeirah were top picks for luxury villa rentals, the report added. A separate report by Springfield Properties showed that apartment rents in Dubai for the second quarter of this year increased to an average of Dh72,090 ($19,629) per annum, up from Dh66,725 in the corresponding period last year. Townhouse rents on average also recorded healthy growth, rising to Dh165,783, while average villa rents increased to Dh263,373, compared to Dh224,879 a year ago, the real estate agency reported. 'The consistent rise in rental values, especially in prime communities, highlights the strong yield potential for property investors in Dubai. With growing tenant demand and attractive rental returns, the market remains a favourable environment for both short- and long-term investment strategies,' the report said.
The National
7 hours ago
- The National
What foreigners need to know about buying property in Saudi Arabia
Foreigners will be able to buy real estate in designated areas in Saudi Arabia from January 2026. Housing Minister Majed Al Hogail told the Saudi Gazette on Wednesday that 'ownership will be permitted within specific geographic areas − particularly in the cities of Riyadh and Jeddah − with special requirements for ownership in Makkah and Madinah'. In January, the kingdom allowed foreigners to invest in publicly listed local companies that own real estate in Makkah and Madinah. Saudi Arabia has taken several measures to boost its attractiveness as a global investment destination as part of its Vision 2030 plan to wean the economy off its dependency on oil revenues. Here's what you need to know about buying property in Saudi Arabia: Where can foreigners buy property in Saudi Arabia? Starting January 2026, international buyers will gain access to the Saudi real estate market within designated areas. While Riyadh and Jeddah are likely to be prioritised for foreign ownership, Makkah and Madinah will have specific conditions or restrictions. Not all areas will be open to foreign ownership. The Real Estate General Authority, the regulatory body for real estate in Saudi Arabia, will define the permitted zones and their conditions in the forthcoming executive regulations. 'The law includes geographic restrictions to maintain cultural, religious and regulatory sensitivities. These measures aim to balance international investment with national interests and community integrity,' says Amar Hussain, associate partner, research – Middle East, at real estate consultancy Knight Frank. The law is expected to permit ownership of various asset types, including residential and commercial properties and possibly agricultural land, subject to specific location-based conditions and oversight, Mr Hussain adds. Most of Saudi Arabia's future projects are in Riyadh and Jeddah as the kingdom prepares for the Fifa World Cup in 2034. In addition, the 2029 Asian Winter Games will be another opportunity to showcase the development work in the kingdom, according to Junaid Ansari, director of investment strategy and research at Kamco Invest. Who can buy under the new scheme? The new law is understood to include both foreign residents and non-resident foreigners, effectively opening the kingdom to a global investor base, Matthew Green, head of research at CBRE Mena, says. In other similar moves within the region − namely the UAE, Qatar and Oman − this has led to the start of a new real estate cycle and subsequent positive value growth in the preceding years, as 'improved ownership title, new regulations, bigger addressable market and wider source markets' help to transform the real estate landscape, he explains. Why buy in Saudi Arabia? The local demand is significant and there is an undersupply in the residential sector. Also, prices in Saudi Arabia are still broadly lower than similar property prices in the UAE, according to Mr Ansari. House prices in the designated international investment zones are likely to perform better, or grow faster than the rest of the market, where the rate of house price growth is likely to slow as domestic households move into longer holding patterns before they are able to transact, according to Faisal Durrani, head of research Mena at Knight Frank. Can foreigners buy property in the kingdom today? International buyers and investors are already able to access the property market in the kingdom under the property-ownership linked premium residency visa, which was launched in January 2024, Mr Durrani says. The conditions attached to this are a minimum spend of 4 million Saudi riyals ($1.1 million) and that the properties must be fully completed and mortgage-free, he informs. Separately, this January, laws were amended to permit international investors to access property markets in the holy cities of Makkah and Madinah through listed property development companies. 'In the wake of Vision 2030 and the subsequent giga project announcements, demand from international buyers for homes in the kingdom has been building on the sidelines,' Mr Durrani says. 'This demand is strongest among global Muslim high-net-worth individuals who are non-residential in the kingdom. In fact, 86 per cent of global Muslim HNWIs are keen to own a home in the kingdom, with the majority focused on the Makkah and Madinah.' Mr Green of CBRE says ownership in the kingdom is currently restricted to those participating in the premium residence scheme through licensed foreign developers and other indirect ownership vehicles, including real estate funds or through shares in a publicly listed company. What can you buy? The new law is expected to permit a broader scope for foreign ownership, with individual units and buildings across designated areas, Mr Green says. 'Opening the market up to international buyers and investors is something that has been long anticipated,' Mr Durrani says. This will facilitate greater international investment, while ensuring that Saudi nationals aspiring to own a home are not necessarily competing directly with global buyers Faisal Durrani, head of research Mena, Knight Frank 'This is an exceptionally positive move and will facilitate greater international investment in the real estate market, while ensuring that Saudi nationals aspiring to own a home are not necessarily competing directly with global buyers.' What hurdles are investors likely to face? The biggest hurdle would be the residency issue, but the kingdom is expected to ease the golden visa programme and other ways to attract talent and people, says Mr Ansari from Kamco Invest. 'Even the UAE opened its market very gradually. We believe the UAE's experience would also play a key role in drafting future residency rules,' he reckons. The executive regulations defining ownership procedures, eligibility and restrictions are still pending in the kingdom. 'It is highly likely that the Real Estate General Authority regulations will include updated terms and fees related to acquiring the new property title, and that some of the historical taxations may be amended to encourage foreign investors to enter the market,' CBRE's Mr Green says. 'However, preparations have already begun, with REGA now working to finalise the finer details of the law, including clarification on the designated areas, related restrictions, refinement of the registration process, and related fees.' However, the Saudi real estate market is still maturing, and processes may not be as streamlined as in neighbouring countries, according to Knight Frank. Will foreign ownership make house prices more unaffordable? The decision to allow international buyers access to real estate markets in the kingdom in specific investment zones is likely to be confined to the major giga projects, which will have the impact of creating a two-tiered market – one for international buyers and one for domestic buyers, says Harmen de Jong, regional partner – head of consulting at Knight Frank. As a result, prices within giga projects are likely to accelerate faster than the rest of the more mainstream market, he estimates. The acceleration of house prices in Saudi Arabia over the past five years has been 'exceptional', with prices for apartments in Riyadh, for instance, up by nearly 82 per cent since 2019. However, salaries have not risen by a commensurate level and affordability challenges have begun to emerge, according to Knight Frank. Mr Ansari from Kamco Invest also expects property supply to 'increase gradually' as regional and international real estate companies boost their presence in the kingdom, similar to the gradual growth recorded in the UAE and other GCC countries that opened their real estate sector. Is property tax levied in Saudi Arabia? Historically, Saudi Arabia has not imposed property taxes in the same way as some other countries, but this may change with the new regulations, according to Mr Hussain from Knight Frank. Detailed provisions regarding legal protections, rights of inheritance and dispute resolution mechanisms are not yet available. More clarity will come with the release of executive regulations, he adds. Saudi Arabia levies a 5 per cent real estate transaction tax, which is applied to the ownership transfer of an asset based on the property's sale value. This is normally paid by the seller in advance, CBRE's Mr Green says. However, there are multiple exceptions, such as for inheritance, when the transfer is to a first degree relative. Similarly for other government and special interest cases, the tax is sometimes exempted. 'There is also 15 per cent VAT, which is sometimes applied to the sale and lease of commercial properties (including office, retail and industrial properties), but residential properties are exempted,' he says. 'Other fees are also applied, including title deed registration, service connection fees, permitting fees, etc. 'Finally, there is a capital gains tax that can be applied on the sale of a business asset (real estate, shares, etc.) if it is traded for a profit over and above the original purchase value. The application of this tax can vary, with a 2.5 per cent zakat or 20 per cent tax on ordinary income. However, the CGT is not currently being applied to an individual buying or selling property.'
Arabian Business
12 hours ago
- Arabian Business
UAE holiday dates; Commission-free Dubai real estate apps; 2025 visa-free travel ideas; Major Saudi property news – 10 things you missed this week
From game-changing real estate trends to major government updates across the UAE and Saudi Arabia, this week's top stories are shaping the region's business and lifestyle landscape. Whether you're planning your next holiday, exploring investment opportunities, or tracking policy changes, we've got you covered. Catch up on 10 of the biggest news stories this week, as selected by Arabian Business editors. UAE National Day 2025: Will there be a five-day weekend? Expected dates revealed UAE residents may be able to look forward to another long weekend in December 2025 as National Day approaches. UAE National Day is officially marked on December 2 and 3 each year. In 2025, these dates fall on a Tuesday and Wednesday. While the UAE government has not yet confirmed any extended break, residents may expect Monday, December 1 to be an additional day off, making it a five-day weekend. Commission-free apps challenge Dubai real estate brokers as direct buyer-seller models rise Dubai's property market is facing a shift as new digital platforms allowing direct buyer-seller connections threaten to make traditional real estate brokers obsolete, experts told Arabian Business. This shift mirrors how online booking services disrupted the travel agency industry over a decade ago. Some believe the real estate industry is now facing its travel agency moment. 'We're not approaching disruption, we're already in it,' said Ainsley Duncombe, founder of Off Market Listing Dubai and a 17-year veteran of the emirate's property scene. 'Think back to the travel industry. How often do people still use traditional travel agents? That same transformation is already underway in real estate.' UAE summer 2025: Visa-free travel destinations for Indian passport holders from Dubai Indian passport holders residing in the UAE have access to a wide range of visa-free, visa-on-arrival, and e-visa destinations in summer 2025. Click here to see a few countries and regions open for travel without a pre-approved visa or visa-on-arrival for Indian passport holders from Dubai. Indian passport holders in Dubai are advised to confirm entry requirements with official embassy or consulate sources before booking travel, as visa rules may change without prior notice. Dubai real estate: Investors can soon buy, sell property under new DLD, deal Dubai real estate investors may soon be able to buy and sell property using digital currencies like Bitcoin, following a new partnership between Dubai Land Department (DLD) and DLD, in partnership with will develop a digital investment environment for virtual real estate assets and explore blockchain technologies and digital currencies within the sector. The agreement follows the Dubai Government's announcement of plans to enable payment of government fees using digital currencies, representing a step forward in integrating technology with public services and reinforcing the emirate's leadership in government innovation. Saudi Arabia announces new work permit system for expats Saudi Arabia's Ministry of Human Resources and Social Development has implemented a new system for expat work permits. The new classification system divides expat workers in the kingdom into three skill categories: high-skill, skilled, and basic. Minister Ahmed Al-Rajhi announced the decision, which aims to enhance worker performance and attract global talent to transfer expertise and experience to the Saudi labour market. Dubai real estate prices climb in H1 2025 as villas surge up to 11% and ROI hits 11% in key communities Dubai's residential real estate market maintained strong momentum in the first half of 2025, with rising prices, high rental yields, and increased investor confidence across both ready and off-plan segments. According to a market report from Bayut and dubizzle, the emirate's real estate sector is entering a more mature, data-driven phase, where long-term value, transparency, and trusted insights are shaping buyer and seller decisions. In the ready sales segment, villa prices in Dubailand surged by up to 10.4 per cent, driven by demand for larger, affordable homes. Other high-performing communities included Dubai South, DAMAC Hills 2, and Dubai Sports City. Saudi cabinet approves law on property ownership by non-citizens The Saudi Arabian Cabinet, chaired by Crown Prince and Prime Minister Mohammed bin Salman, approved an updated law regulating property ownership by non-Saudis. The law aims to develop the real estate sector and encourage foreign direct investment. The new law permits ownership in the Holy Cities of Makkah and Madinah, albeit with special requirements, and comes into effect from January 2026. The cabinet decision mandates the Real Estate General Authority with the responsibility for proposing the areas within which non-Saudis may own real estate or acquire other property rights. The authority will publish the executive regulations of the law on the Istitaa public survey platform and seek viewpoints and suggestions of the public within 180 days of its publication in the official Umm Al-Qura Gazette. Dubai's RTA launches trials for driverless vehicles Dubai's Roads and Transport Authority (RTA) has signed a Memorandum of Understanding with a company specialising in autonomous driving technologies, to begin pilot trials of autonomous vehicles in the emirate. The trials are scheduled to begin later this year, with plans to launch a fully driverless commercial service in 2026. recently unveiled the seventh generation of its autonomous vehicles, developed jointly with automotive manufacturers including Toyota, GAC, and BAIC. The company's vehicles feature artificial intelligence algorithms and sensors, including lidars, radars, and cameras, designed to ensure navigation and safety across road and weather conditions. UAE denies lifetime Golden Visa claims The UAE has denied rumours it is granting lifetime Golden Visas to citizens of certain nationalities. The Federal Authority for Identity, Citizenship, Customs and Port Security (ICP) denied the accuracy of rumours circulated by some local and international media outlets and websites regarding the granting of lifetime Golden Visas to certain nationalities. ICP clarified that the categories, conditions, and regulations of the Golden Visa are clearly defined in accordance with official laws, legislations, and ministerial decisions. UAE flight cancellations: Emirates announces travel update Dubai-based carrier Emirates has announced updated flight cancellations, extending its suspension of Iran flights. Until July 17, Emirates will not fly to and from Tehran citing 'operational reasons' in its latest travel update. The airline announced the extension on July 8, marking the latest in a series of suspensions that have affected the route since mid-June due to regional tensions.
