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Home Ownership in Saudi Arabia Now Desired by 77% of Saudi Expats
Home Ownership in Saudi Arabia Now Desired by 77_ Saudi Expats

According to a survey by the Global Property Consultancy Firm Knight Frank, the new premium residency visa options available in Saudi Arabia have increased home ownership interest amongst expats to 77%.

The survey highlighted a potential demand of $863 million for homes located within upcoming gigaprojects.

NEOM stood out as the top choice amongst respondents at 24%, followed by Jeddah Central at 15% and King Salman Park at 8%. 

Additionally, Riyadh emerged as the top city choice for property purchases at 44%, followed by Jeddah at 24%.

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The Impact of New Premium Residency Visa

According to Knight Frank’s latest survey, expats living in the Kingdom have expressed a strong interest in buying real estate in Saudi Arabia, with a majority of 77% of expats expressing their desire to own a home in the Kingdom, with the percentage increasing to 85% for those under the age of 35.

Although this may encourage developers, the demand is short-term, as only 26% plan to make transactions this year. A majority of 44% prefer to purchase within the next 12-24 months. 

This cautious approach could be attributed to the considerable increase in house prices throughout the Kingdom in the past three years.

Image Credit Diriyah Company

The introduction of the New Premium Residency Visa, associated with property ownership, is expected to meet some of this demand. Saudi Arabia’s 5 new categories of its Premium Residency Program aims to attract global talent and diversify the economy.

The 5 new categories are:

  1. Special Talent
  2. Gifted
  3. Investor
  4. Entrepreneur
  5. Real Estate Owner

Although only 9% of the participants are willing to invest more than SAR 3.5 million, the minimum requirement for the new Premium Residency Real Estate Visa is set at SAR 4 million.

A Focus on Riyadh

With the Saudi government’s goal of achieving a 70% homeownership rate by 2030, the demand for properties has grown substantially. This surge in demand has been particularly pronounced in Riyadh, with the city emerging as millennials’ top choice for property purchases. 

In the survey, expats were questioned about their preferred location for buying property in Saudi Arabia. The majority (44%) chose Riyadh as their top choice, followed by Jeddah with 24%. 

Residential Projects in Riyadh

New Murabba

Image Credit New Murabba

The New Murabba Development Company and the Tourism Development Fund of Saudi Arabia have partnered to create the New Murabba, which is set to become the biggest central area in Riyadh. 

The iconic project, highlighted by the iconic Mukaab tower at its heart, will encompass 2 million square meters of floor space and include retail sections, tourist destinations, and hotels

The project is projected to contribute $48 billion to the Saudi economy and generate approximately 334,000 jobs, directly and indirectly.

Ritz-Carlton Residences in Riyadh

Image Credit Diriyah Company

The Diriyah Company, in partnership with Ritz-Carlton, has announced its upcoming launch of high-end branded residences in Saudi Arabia. These luxurious Ritz-Carlton Residences will be located in Riyadh’s bustling heart of the $63 billion Diriyah Giga project. 

Each villa will offer three distinct interior styles, ranging from traditional Najdi to modern contemporary designs, providing a unique and luxurious living experience. The Diriyah Project is set to include 20,000 residential units and exclusive hotels and dining options.

SEDRA by ROSHN Group

Image Credit ROSHN

SEDRA, Riyadh’s most sought-after project, is located in the heart of Riyadh, spanning 3.4M+ sqm, encompassing 30,000 homes nestled in thriving neighborhoods.

Image Credit ROSHN

The living community of SEDRA includes well-designed homes accompanied by mosques, nearby shops, cozy cafes and restaurants, open green spaces, educational institutions, fitness centers, sports facilities, and various entertainment areas for the neighborhood.

Sedra is close to the various shops and dining establishments of ROSHN Front, within a short distance to Princess Nourah Bint Abdul Rahman University and King Khalid International Airport. For convenient travel throughout the city, Airport Road and Al Thumama Road are easily accessible.

Elie Saab Branded Residences

Image Credit Dar Al Arkan

The first Elie Saab Branded Residences have been launched in Riyadh. Dar Al Arkan, a notable real estate enterprise in Saudi Arabia, has launched Etoile by Elie Saab in the SEDRA community north of Riyadh, close to King Khalid International Airport. 

SEDRA is a highly desirable development in Riyadh, spanning 20 million square km, and is a component of the ROSHN Giga project, which is fully owned by the Public Investment Fund (PIF). ROSHN’s objective is to increase the homeownership rate for Saudi citizens to 70% by 2030.

Riyadh’s appeal spans all age groups, with a peak of 48% among those aged 45-55 and a slightly lower percentage (41%) among Millennial expats. The city’s appeal as an attractive destination for tourism and entertainment has been a significant factor behind this trend.

Mohammed Bin Salman Nonprofit City

Image Credit Mohammed Bin Salman Nonprofit City

Mohammed Bin Salman Nonprofit City (MISK), the world’s first nonprofit city, has been funded with SAR20.4 billion ($5.4 billion), will include 99,000 sq m of retail and recreational areas, 300,000 sq m of office spaces, and 6,500 new homes. 

Image Credit Mohammed Bin Salman Nonprofit City

The Misk is expected to host around 450 fresh businesses and accommodate a population of 19,500 permanent residents. It also aims to involve 14,800 professionals from various sectors. A wide range of cultural, educational, and sports facilities will also accompany this.

Major Wellbeing and Recreation Projects in Riyadh

Image Credit King Salman Park

At the core of Saudi Arabia’s development, the city of Riyadh embodies sustainability as its fundamental principle. The government has introduced various initiatives to incorporate environmental factors into the city’s structure. 

These initiatives aim to create a well-connected public transportation system and foster a strong sense of community within neighborhoods. 

King Salman Park

Image Credit King Salman Park

[King Salman Park], the largest urban park in the world, is scheduled to open in 2024 covering a total area of 16 square kilometers. 

The park includes 11 square kilometers of greenery and water features, located in the heart of Riyadh. 

Image Credit King Salman Park

Among its major attractions will be a Royal Arts Complex, an equestrian center, an 850,000 square meter Royal golf course, and the city’s first sky diving center. 

In addition, the park will offer over 2,000 hotel rooms and aims to elevate the quality of life in the city in accordance with the goals of Saudi Vision 2030, thereby improving Riyadh’s global ranking.

AL-URUBAH Park

Image Credit RCRC

The Royal Commission for Riyadh City has recently announced the construction of one of the biggest parks in the city, [Al-Uruba Park]. 

This park, spanning over 754,000 square meters, will include a 3-kilometer long panoramic path, standing 12 meters high, specifically designed to offer breathtaking views of Riyadh. 

Image Credit RCRC

The park’s landscape will be adorned with more than 600,000 trees and shrubs, covering 65% of its total area. 

Al-Uraba Park is a significant part of the Green Riyadh Program, which has set a goal to plant 7.5 million trees in the city of Riyadh, to reduce the city’s temperature and air pollution levels, ultimately making it one of the most desirable places to live in the world.

Riyadh Sports Boulevard

Image Credit Sports Boulevard Foundation

The Riyadh Sports Boulevard has been designed to be the longest linear park in the world, with the purpose of connecting the Wadi Hanifa in the western part of Riyadh to the Wadi Al Sulai in the eastern part of the city, spanning a total distance of 135km. 

This project aims to transform Riyadh into one of the world’s most livable and healthy cities. The development plans to include various pathways, bike lanes, and horse riding trails, covering a vast area of 4.4 million square meters of green spaces. 

The impressive initiative will also consist of 8 exceptional districts, such as an athletics district, an entertainment district, and an arts district.

With these transformative projects, Riyadh is transforming into a city known for its accessibility and quality of life with an aim to become among the world’s top 10 cities with an investment of $1 Trillion over the next seven years.

Motivation Behind Property Purchase in Saudi Arabia

Due to the significant increase in house prices, it is not unexpected that more than half of the expat survey participants (57%) attribute their desire to purchase a home to it being a lucrative investment opportunity. 

This is closely followed by the desire to live near their workplace (35%) and cultural or religious considerations (29%).

According to the survey, the primary motivation for millennial foreigners is finding a ‘good investment opportunity.’ However, many also consider Saudi Arabia an ‘attractive destination’ for tourism and entertainment (32%). 

This could be attributed to the Entertainment Seasons’ success throughout the country and the diverse range of cultural, sporting, and arts events organized by the government to enhance and diversify the Kingdom’s entertainment options.

Shift Towards Apartments

There’s also a notable shift in preference among expats from villas to completed apartments. According to the survey, most expats (68%) prefer owning an apartment to other housing types. This percentage increases to 74% for individuals aged 35-45 and 73% for those aged 45-55.

The choice between apartments and villas seems to vary with income levels. For instance, 92% of expats earning more than SAR 40,000 per month prefer villas, while 60% of those earning between SAR 30,000 and SAR 40,000 per month lean towards townhouses.

There was also a significant interest in branded residences among the higher-income brackets.

Rise of Saudi’s Gigaprojects

Interestingly, the survey also revealed a potential demand of $863 million from the white-collar workforce for gigaproject properties. 

Image Credit NEOM

Gigaprojects refer to the Kingdom’s ambitious developments, such as NEOM, a $500 billion gigaproject, and the Red Sea Global project worth $23.6 billion, which are part of the Vision 2030 initiative.

Image Credit Jeddah Central Development Company

According to a survey, the top choice among expats for purchasing a home to live in is NEOM (24%), with Jeddah Central (15%) and [King Salman Park] (8%) following closely behind. 

Among the individuals interested in NEOM, 42% have shown interest in The Line, while 19% have expressed interest in Sindalah Island, and 10% have indicated interest in Sharma Valley.

Image Credit NEOM

The NEOM giga project currently covers 14 distinct regions ranging from a 100 mile city called The Line to an all year round ski resort called Trojena:

The Expat participants generally have an average budget of SAR 2.7 million for purchasing a Giga project, which is higher than the average budget of SAR 1.7 million in other areas of the Kingdom. 

According to Knight Frank’s findings, Millennial expats have the largest budgets, with an average of SAR 4.3 million, which is almost double the potential budget of 45-55-year-olds (SAR 1.5 million).

“The fact that high earners are prepared to spend more on giga-project homes will be welcome news for developers, but the key will be to offer distinctive community features and amenities that go above and beyond.” – Mohamad Itani, Knight Frank partner.

Enticing Aspects of Residential Communities

The survey findings also highlighted the rising demand for residential communities, driven by an increasing number of Western expatriates seeking a lifestyle that matches their expectations. 

Of all the expat participants, 75% expressed interest in buying a property in a residential community. This percentage increases to 77% for Millennials and individuals aged 45-55 and further rises to 83% for female expat respondents.

These gated communities, known for their amenities such as swimming pools, cafes, and fitness centers, offer a high standard of living. Western compounds are characterized by their larger size, superior services, extensive amenities, and heightened security, typically catering to Western expats.

According to the analysis, the rental fees in Western compounds are typically 54% more expensive than those in non-Western compounds. 

For example, the average annual rental fee for a two-bedroom apartment in a Western compound in Riyadh can reach up to SAR 180,000, while the maximum fee for the same in a non-Western compound is SAR 85,000 per annum.

Future Trends and Predictions

Image Credit Dar Al Arkan

The future of Saudi Arabia’s real estate market looks promising, with the government’s goal of achieving a 70% homeownership rate by 2030, supported by mortgage programs. 

Despite these challenges, the allure of Saudi Arabia’s real estate market remains strong. With the Kingdom’s Vision 2030 initiative driving development and modernization, the interest in property ownership among expats is likely to continue its upward trend.

Keep Reading: High Net Worth Muslims Ready to Spend $2 Billion In Real Estate Investments in Holy Cities.

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