Saudi real estate sector contributes 5.9 percent to GDP, hits $169.5 billion in transactions – Economy Middle East

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Real estate activities in Saudi Arabia have continued to grow since the beginning of 2024, recording more than 280,000 transactions worth more than SAR636 billion ($169.5 billion), and extending over a total area of more than two billion square meters.

The sector’s contribution to the Saudi GDP reached 5.9 percent in the fourth quarter of 2023.

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Recent real estate stock exchange activity

During the last week ending June 22, 2024, the real estate stock exchange witnessed 518 deals, with a transaction value exceeding SAR331.7 million, and a trading area of about 900,000 square meters. The highest recorded price per square meter reached about SAR15,000, while the average price was SAR371.

Top traded neighborhoods

The Al-Wisam area in Jeddah topped the list of the most traded neighborhoods in Saudi Arabia on the real estate stock exchange during that week, with a value of transactions exceeding SAR89.3 million, followed by the Arid district in Riyadh, with a value reached SAR6.35 million. The list also included Al-Rimal neighborhood in Riyadh, with a value of SAR5.59 million, Jawharat Al-Arous in Jeddah, with a value of SAR3.98 million, and the northwestern Al-Bukayriyah district, with transactions reaching SAR 700,000.

High transaction volume reflects investor confidence

Experts believe the real estate sector is considered the safest option in light of the volatility and fluctuations seen in the stock and gold markets, as well as the impact of rising interest rates.

The real estate market in Saudi Arabia has demonstrated stable and steady growth across all its sectors. This is attributable to investors’ confidence in the government’s policies and the injection of substantial capital through the launch of major real estate projects such as Qiddiya, NEOM, and the Red Sea development.

Other market observers have noted that the performance of the Saudi real estate market reflects remarkable growth and sustainable demand. The high volume and size of transactions registered through the real estate exchange underscores the confidence of investors, which can be attributed to the government’s efforts and the economic reforms implemented as part of Vision 2030.

Read more: Residential Q1 sales transactions up by 77 percent year-over-year in Riyadh

Real estate’s economic importance

The real estate sector represents one of the basic pillars of the Saudi economy and contributes significantly to supporting the gross domestic product through huge investments and large development projects. 

Government initiatives to regulate and promote investments in the real estate sector have revitalized the economy and created broad job opportunities for citizens and a variety of new skills in the real estate sector, thus reducing unemployment rates and achieving sustainable development.

Saudi Arabia real estate

Saudi Arabia real estate

Factors supporting continued growth

Experts see that there are several reasons that supported the continued growth and sustainability of the Saudi real estate sector, including economic reforms and policies for investment, the government’s efforts to improve the business environment by facilitating procedures, the mega projects taking place in the Kingdom and their role in attracting investments, the increasing demand for housing and associated services as a result of urbanization, and the political and economic stability that played a vital role in enhancing investor confidence and encouraging long-term investment in real estate.

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