The Saudi Arabian real estate sector has witnessed significant growth, contributing 5.9% to the country’s GDP in the fourth quarter of 2023. The first half of 2024 saw the sector boom, recording over 280,000 transactions worth more than $169.5 billion and covering a total area exceeding two billion square meters.
Recent Market Activity
The week ending June 22, 2024, on the Saudi real estate stock exchange saw a flurry of activity with 518 deals exceeding $88.5 million in total transaction value. These deals covered approximately 900,000 square meters, with the highest price per square meter reaching $4,000 and the average price at $98.
Top Traded Neighborhoods
Jeddah’s Al-Wisam area led the market with transaction values exceeding $23.5 million. Following closely were Riyadh’s Arid district ($1.67 million), Al-Rimal neighborhood ($1.47 million), and Jeddah’s Jawharat Al-Arous ($1.05 million). The northwestern Al-Bukayriyah district also saw notable activity with $186,000 in transactions.
Investor Confidence and Market Stability
Experts attribute the sector’s strong performance to its perceived safety compared to volatile stock and gold markets with rising interest rates. Government investments in mega projects like Qiddiya, NEOM, and the Red Sea development bolster investor confidence, reflecting effective government policies.
Economic Impact
The real estate sector plays a vital role in Saudi Arabia’s economy, contributing significantly to GDP through extensive investments and development projects. Government initiatives have not only revitalized the economy but also created numerous job opportunities, reducing unemployment and fostering sustainable development.
Factors Supporting Growth
Several factors are propelling the sector’s continued growth:
- Economic Reforms and Investment Policies: Streamlined procedures and attractive policies have created a more favorable business environment.
- Mega Projects: Large-scale developments attract significant domestic and foreign investments.
- Urbanization: Rising demand for housing and related services fuels market activity.
- Stability: Political and economic stability fosters investor confidence, encouraging long-term investments.
Overall, the Saudi Arabian real estate market demonstrates stable and steady growth, solidifying its position as a pillar of the economy and a safe investment option amidst global market fluctuations.
Source: economymiddleeast.com
