Real Estate Investments in Saudi Arabia

Given the economic slowdown in Europe, is it time for investing in the Saudi real estate?

There is no doubt that the past several years have been difficult for economies around the globe.

Despite the fact that few, if any, worldwide markets have evaded the detrimental consequences of Covid-19, Europe has suffered more difficulties than others. The combination of ever-rising energy prices and the crisis in Ukraine has significantly impeded the continent’s recovery from the pandemic.

An improved outlook

Real GDP growth in the Kingdom is anticipated to reach 7.5% in 2022, which would be the fastest rate of growth for the kingdom since 2011 and rank it at the top of the economic growth chart for the 20 largest economies in the world (measured in US dollars at purchasing power parity). In 2023, the real Gross Domestic Product (GDP) growth rate in Saudi Arabia will be close to 5%, before decelerating to around 3% between 2024 and 2026.

Therefore, if Saudi Arabia’s economy is gaining pace just as other regions are feeling the strain, should international real estate investors focus on the Kingdom?

During the second quarter of 2022, institutional occupiers in the Eastern Province were inactive. In the year leading up to the second quarter of 2022, average Grade. As rentals in Dammam climbed by 2.9%, while they stayed steady in Khobar. The average apartment price per square metre in Saudi Arabia increased by 6.2% between Q2 2021 and Q2 2022. During this time period, apartment prices in Khobar, Jeddah, Riyadh, and Dammam rose 11.3%, 5%, 4.2%, and 4.1%, respectively. With the exception of Khobar, the annual rate of price growth in the second quarter of 2022 has slowed significantly in all major cities.

Summary

In summary, during the first half of the year, Saudi Arabia’s retail industry saw an increase in retail space and a robust rebound in domestic demand due to the easing of COVID-19 limitations. As the government pursues its ambitious goal of making the city one of the 10 largest in the world by 2030, the underlying demand for residential properties in the capital remains robust and is anticipated to continue to grow over the longer term.