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Saudi Real Estate Industry: Steady Growth and Investment Opportunities Driven by Government Strategies
Jul 8, 2024
by Internet
  • Market Insight
  • Saudi Arabia Real Estate
  • Property Investment
  • Saudi Arabia Housing Market
Abstract : Saudi Arabia's government is actively promoting the development of the real estate sector, showcasing its strategic initiatives recently at the 2nd Saudi Real Estate Development and Ownership Exhibition (SEREDO) held in Jeddah, attracting attention from domestic and international industry professionals and investors alike.

Tayseer bin Mohammed Al-Mufarrij, spokesperson for the Saudi Real Estate Authority, revealed during the event that the Saudi government has enacted over 18 legislations pertaining to real estate systems, administrative regulations, and regulatory provisions. These measures not only align with Saudi Arabia's Vision 2030 but also underscore the government's steadfast commitment to advancing the real estate industry.

Al-Mufarrij emphasized the significant contribution of the real estate sector to Saudi Arabia's Gross Domestic Product (GDP). As per his remarks, in the fourth quarter of 2023, the real estate industry contributed 5.9% to Saudi GDP. Furthermore, the sector plays a crucial role in supporting non-oil economic activities in Saudi Arabia, contributing up to 12.1%.

Saudi Arabia's real estate development and ownership market is regarded as one of the fastest-growing industries in the Middle East. It is projected that by 2024, the market size will reach approximately USD 69.51 billion, with expectations to grow to USD 101.62 billion by 2029, achieving a compound annual growth rate of 8%.


In recent years, the Saudi government has implemented several measures through its National Transformation Plan to stimulate mortgage demand. These include the MoMRAH Sakani program led by the Ministry of Municipal and Rural Affairs and Housing (MoMRAH), as well as support from the Real Estate Development Fund (REDF) through interest-free mortgage loans and REDF mortgage guarantee programs. Additionally, measures such as reducing the real estate tax rate to 5% and the undeveloped land tax to 2.5% further support the healthy development of the real estate market.

The government has also established the Saudi Real Estate Refinancing Company (SRC), fully owned by the Public Investment Fund (PIF). SRC's primary mandate is to purchase mortgage loans from banks and other financial institutions and refinance them through the issuance of government-backed Islamic bonds. By the end of 2023, SRC had acquired SAR 26.7 billion worth of mortgage loans, equivalent to approximately 5% of the Saudi banking system's mortgage loan book. SRC's refinancing through Islamic bonds enhances liquidity and development in the real estate market.


Furthermore, the Saudi government holds financial interests in real estate developers operating in the country through the Public Investment Fund (PIF). PIF holds stakes in certain real estate companies listed on the Saudi Stock Exchange (Tadawul), such as a 25% stake in Emaar Economic City and a 64.6% stake in Saudi Real Estate Company, as well as other unlisted companies.

ROSHN, one of Saudi Arabia's largest real estate developers, plans to construct approximately 400,000 housing units by 2030. Last year, ROSHN secured SAR 6 billion in bank financing, demonstrating significant progress in its large-scale housing plans.

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