The General Authority for Statistics (GASTAT) in Saudi Arabia has published the real estate price index for the third quarter of 2024, revealing a 2.6 percent rise compared to the same quarter last year.
The residential sector was the main contributor to this overall increase, experiencing a 1.6 percent annual growth. This uptick was driven by a 1.6 percent rise in residential land prices, a 1.9 percent increase in apartment prices, and a 1.5 percent boost in villa prices.
The commercial sector also saw notable growth, with prices climbing 6.4 percent in Q3 2024 compared to the same period in the previous year. This was largely due to a 6.3 percent increase in commercial land prices and an 8.6 percent rise in building prices. However, prices for galleries and shops dipped by 1.1 percent, and agricultural land prices fell by 8.7 percent.
#GASTAT Publishes Real Estate Price Index for Q3 of 2024
— الهيئة العامة للإØصاء (@Stats_Saudi) October 27, 2024
Vision 2030 impact
Fueled by the ambitious Vision 2030 agenda aimed at economic transformation and diversification, Saudi Arabia’s strategic initiatives and substantial investments in infrastructure and mega projects continue to bolster growth and resilience in the Kingdom’s real estate market.
Strong performance in residential and hospitality sectors
According to JLL’s latest KSA Real Estate Market Dynamics Report, the residential and hospitality sectors have demonstrated strong performance in the first half of 2024. This success can be attributed to government initiatives aimed at increasing home ownership, the introduction of tourist visas, the expansion of entertainment options, and efforts to promote sports and new experiences, all designed to position the Kingdom as a leading global leisure destination.
Residential market activity
The residential market had a strong start in 2024, with the completion of 27,500 units in Riyadh and Jeddah during the first half, bringing the total stock to roughly 1.46 million units in Riyadh and 891,000 in Jeddah. An additional 16,000 units are expected to be added in both cities by year-end.
Price trends in Riyadh and Jeddah
In Riyadh, residential sale prices surged by 10 percent year-on-year in the first half, while average rents climbed by 9 percent. Jeddah saw more modest growth, with sale prices rising by 5 percent and rents by 4 percent during the same timeframe. Despite rising construction costs and other challenges, the KSA residential market is on a positive trajectory for further growth and development.
Dammam metropolitan area developments
In the Dammam Metropolitan Area (DMA), residential development is shifting inland, particularly in Khobar, which has seen the most activity. Sale prices have remained stable, while rents have experienced a slight annual increase of 4 percent.
Hospitality sector growth amid tourism surge
As Saudi Arabia prepares to welcome 150 million visitors by 2030, the hospitality sector has also demonstrated substantial growth in the first half of 2024. The average occupancy rate in the Kingdom rose by one percentage point year-on-year, and the average daily rate (ADR) increased by 7 percent, resulting in an 8 percent rise in revenue per available room (RevPAR). In the Holy Cities of Makkah and Medina, key performance indicators have generally improved, with RevPARs increasing by 4 percent and 15 percent, respectively. In Riyadh, the ADR soared by 25 percent, driven by an uptick in corporate visits linked to major events in the capital.
Surge in real estate transactions
Saudi Arabia’s real estate sector experienced a surge in demand during the first half of 2024, with the total number of transactions climbing 38 percent to just over 106,700. The total value of these deals rose by 50 percent to SAR 127.3 billion ($33.92 billion) during the same period.
Residential transactions
A recent report from Knight Frank highlights that residential real estate transactions, which comprised 61 percent of Saudi Arabia’s real estate deals by total value, saw a 41 percent increase in the number of transactions, totaling just under 91,860 sales. The value of residential transactions also rose by 48 percent to SAR 77.6 billion over the same timeframe.
Major developments by Diriyah Company
In July 2024, Saudi Arabia’s Diriyah Company announced a SAR 8 billion ($2.13 billion) contract for the construction of four luxury hotels and the Royal Diriyah Equestrian & Polo Club as part of its Wadi Safar masterplan. This contract was awarded to a joint venture of two Saudi construction firms, Urbacon and Al Bawani. The hotels included in the deal are Aman, Six Senses, The Chedi, and Faena. Additionally, Diriyah Company stated that this is its largest single contract to date, following the announcement of a $2.07 billion deal to develop the Northern District earlier in July.
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