Here is the rewritten article entirely in English:
The Kingdom of Saudi Arabia’s real estate sector is poised for significant growth and expansion due to a combination of factors. The population of the country is increasing rapidly, driven by government initiatives aimed at reducing the nation’s reliance on oil revenues. Additionally, the tourism industry is growing steadily, with the kingdom aiming to attract over 150 million visitors by the end of the decade.
The Real Estate General Authority has projected that the property market will reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024. This growth is expected to be driven primarily by government investments in giga-projects, which are being developed to drive non-oil production and attract foreign direct investment.
Matthew Green, head of research at CBRE in the Middle East and North Africa region, highlighted several factors contributing to the expansion of Saudi Arabia’s real estate market. "The country’s supportive demographics, characterized by a significant young and well-educated population, are driving growth," he said. Green also noted that government policies, such as the Sakani program and Real Estate Investment Trusts (REITs), are propelling the sector forward.
Saud Al-Sulaimani, country head of JLL in Saudi Arabia, echoed Green’s views on the significance of government initiatives in driving growth. "The Sakani program supports home ownership by providing financial aid and land to Saudi citizens," he explained. Al-Sulaimani also noted that relaxed ownership laws are making the kingdom’s real estate market more attractive to international investors.
Founded in 2017, the Sakani program aims to increase the proportion of families owning a home in the Kingdom to 70 percent by 2030, as part of Vision 2030. The program provides financial aid and land to Saudi citizens, enabling them to purchase homes. Al-Sulaimani highlighted that this initiative is crucial for reducing homeownership rates and driving economic growth.
The capital market authority has approved foreigners to invest in listed companies owning real estate in Makkah and Madinah since January 27. This move aims to boost the capital market’s competitiveness and align with Vision 2030 objectives. Faisal Durrani, head of research at Knight Frank, noted that this change will help address pent-up demand from international investors.
Susan Amawi, general manager of Knight Frank in Saudi Arabia, emphasized that construction activities are expected to rise significantly in the coming years, with the kingdom targeting to deliver 1.04 million homes by the end of the decade. Government programs such as Wafi and Sakani have pushed national homeownership rates to around 64 percent.
Al-Sulaimani noted that the regional headquarters program is driving growth in the commercial real estate sector. "The program has led to increased demand for high-quality office spaces and mixed-use developments," he explained. Al-Sulaimani added that this influx of international businesses is reshaping real estate dynamics, with a focus on smart technologies, sustainability, and specialized assets.
The kingdom’s strong economic growth, combined with the regional headquarters program, has driven up demand levels for premium office space. Vacancy rates have approached record lows in Riyadh, at around 2 percent. Office rents for Grade A space in Riyadh have risen by 51 percent in the last three years alone.
Durrani noted that Saudi Arabia’s ambition to attract over 150 million visitors by the end of the decade is creating opportunities in the hospitality real estate sector. For domestic tourism to flourish, attention must be paid to developing attractions in secondary and tertiary cities to compete with giga-project offerings.
To meet demand from travelers, cost-effective accommodation facilities are needed. Durrani highlighted that Gen Z Saudis have identified high costs as a barrier to domestic travel. Therefore, there remains an opportunity to develop more affordable options such as budget-friendly room rentals or hostels.
Green emphasized the need for diverse accommodation options, including hotel rooms, long stay suites, private unit rentals (such as Airbnb), and lower-cost hostels and other budget-friendly room options. Al-Sulaimani noted that the adoption of new technologies is critical to streamlining operations and boosting efficiency in the Saudi property landscape.
Companies can leverage AI and data analytics to enhance transparency, improve decision-making, and predict market trends. The development of smart cities focuses on integrating IoT and sustainable technologies, offering residents an improved quality of life. Green emphasized that improving customer experience and service through technology adoption should be a key target for companies operating in the real estate sector.
In conclusion, the Kingdom of Saudi Arabia’s real estate sector is poised to expand significantly due to government initiatives aimed at reducing reliance on oil revenues and promoting economic growth. The sector is expected to reach $101.62 billion by 2029, with an anticipated compound annual growth rate of 8 percent from 2024.