Saudi Arabia is stepping up efforts to help more people own homes and strengthen its real estate market with a new tripartite agreement. The deal involves the Kingdom’s Real Estate Development Fund (REDF), the National Housing Company (NHC), and the Saudi National Bank (SNB). Together, these entities will deliver over 40,000 housing units spread across 24 diverse residential projects nationwide. The initiative aligns tightly with the objectives of Saudi Vision 2030, aiming to increase housing availability and affordability for Saudi citizens and support sustainable economic growth.
The tripartite agreement was formalized in Riyadh under the patronage of the Minister of Municipalities and Housing, Majed Al-Hogail. The signing ceremony was attended by REDF CEO Loay Al-Nahidh, NHC CEO Mohammed Al-Bati, and SNB CEO Tareq Al-Sadhan, marking a collaborative effort between government, real estate development, and financial sectors. The partnership is designed to make homeownership more accessible by offering competitive financing options with profit margins starting as low as 2.99 percent. This enables beneficiaries, particularly those using the off-plan purchase programs, to access housing solutions tailored to their financial capacities and lifestyle needs.
Nationwide housing expansion
The agreement reinforces the government’s commitment to supporting Saudi Vision 2030’s Housing Program, which sets ambitious goals to increase the homeownership rate across the Kingdom to 70 percent by the end of this decade. As of late 2023, the homeownership rate stood at 63.74 percent, reflecting steady progress. The new projects will be distributed across various regions, ensuring that the benefits of this housing expansion are nationwide. This inclusivity fosters regional development and broad-based economic growth.
By integrating the banking sector more closely with real estate development, this partnership also aims to stabilize and diversify the real estate market. The financing solutions offered by SNB, supported by REDF’s housing subsidies and programs, reduce barriers for Saudi families aspiring to own homes. Existing REDF programs include non-refundable down payment support of up to SAR150,000 (approximately $40,000) and other assistance schemes designed to help families manage home financing better.
Moreover, this collaboration exemplifies how Saudi Arabia is leveraging institutional partnerships to create an innovative and resilient housing finance ecosystem. The combined expertise of REDF in housing funding, NHC’s project execution capacity, and SNB’s financial products will accelerate the supply of quality housing units, while maintaining high living standards respectful of Saudi culture and values.
Over 3,000 housing units launched in Madinah and RiyadhÂ
The initiative also plays a vital role in economic diversification, helping reduce the Kingdom’s reliance on oil revenues by boosting the real estate sector. It provides significant employment opportunities throughout the construction and ancillary industries, aligning with Vision 2030’s broader industrial growth targets. The expected surge in housing availability enhances consumer confidence and improves social welfare by providing families with stable living conditions.
Alongside this deal, the NHC has announced the launch of two new residential projects in Madinah and Riyadh, which together offer more than 3,000 housing units, further underscoring the momentum in expanding the Kingdom’s housing supply.
Minister Majed Al-Hogail emphasized that the agreement demonstrates the state’s dedication to ensuring suitable housing for citizens and strengthening market stability with varied financing options. Similarly, SNB highlighted its ongoing role in supporting the Housing Program and market stability through innovative financial solutions.
Progress since 2016
Recently, Knight Frank reported a significant rise in homeownership rates in Saudi Arabia, reaching 63.7 percent by the end of 2023, up from 47 percent in 2016. This improvement reflects substantial progress driven by government initiatives, particularly the Wafi and Sakani programs, which have enhanced homeownership in the low- to mid-market segments.
In 2024, real estate transactions surged, with 236,690 deals totaling SAR267.8 billion, marking increases of 37 percent in volume and 27 percent in value over 2023. Residential sales accounted for 61.5 percent of the total transaction value, with 202,661 residential sales representing a 38 percent increase compared to the previous period.
The report emphasized the continued strength of the branded residential market, fueled by demand from the ultra-wealthy seeking luxury branded homes. At the same time, rental market demand remains robust among both nationals and expatriates, indicating opportunities for build-to-rent projects that have yet to be fully leveraged.
Giga projects and infrastructure investments
Saudi Arabia’s Vision 2030 remains the driving force behind this growth, positioning housing as a catalyst for improving living standards and economic diversification. The Vision has catalyzed 35 giga projects, including the $500 billion NEOM smart city, and bolstered infrastructure investments amounting to $1.3 trillion as of September 2024. This diversification has led to a 17 percent growth in the non-oil sector since 2019, with the International Monetary Fund (IMF) projecting sustained 4 percent annual growth for the rest of the decade.
The Kingdom has also experienced transformative labor market progress, with unemployment rates dropping to a record low of 12.8 percent in the second quarter of 2024, and female labor participation doubling to 35 percent. Riyadh, in particular, has been the focal point of job creation and housing demand, with a projected population growth from 7 million in 2022 to 9.6 million by 2030. This population surge is expected to require 305,000 new homes for Saudi nationals alone, with government-related projects set to add approximately 330,000 housing units by the decade’s end.
Initiatives to enhance housing affordability
Residential prices have risen markedly in Riyadh, with apartment prices increasing by 10.6 percent and villas by 6.3 percent in 2024. Meanwhile, other major cities such as Jeddah have seen more modest price growths, partly due to the migration of businesses and talent to Riyadh. Transaction volumes in Jeddah grew by 53 percent in 2024, supported by a policy lowering minimum down payments from 30 percent to 5 percent, thus enhancing housing accessibility.
Knight Frank also highlighted affordability challenges in Saudi Arabia’s major cities, as housing prices have outpaced income growth, especially in Riyadh where apartment prices have risen by 67 percent since 2018, leading to high income multipliers in various neighborhoods. Nevertheless, affordable segments still exist, particularly in neighborhoods like Tuwaiq. Initiatives addressing affordability include subsidized home financing for lower-income buyers and urban renewal projects such as Jeddah Urban Renewal.
Furthermore, the report underscored a slight cooling in the homeownership drive, with only 33 percent of surveyed Saudi nationals and expats planning to purchase or upgrade homes in 2025, down from 40 percent in 2023. This was attributed to a combination of high homeownership satisfaction, rising borrowing costs, and high property prices limiting demand among some segments. Meanwhile, demand to buy off-plan properties remains significant, especially among those with incomes between SAR20,000 and SAR30,000 monthly.
