Saudi Arabia’s residential market is expected to expand further

On the back of increased demand for housing units, Saudi Arabia’s residential real estate sector, which is heavily concentrated across major cities such as Riyadh, Jeddah, Makkah, and the Dammam Metropolitan Area (DMA), is likely to develop even more in the future years.

Growth in the young population, growing income levels, and recent government measures targeted at increasing access to mortgage finance are projected to provide the most support.

In addition, the government is pursuing a number of programs to expand the private sector’s role in meeting the need for residential units.

The government’s recent decision to exempt real estate transactions from the 15% Value Added Tax (VAT), the execution of large-scale housing schemes, and continuous attempts to expand the mortgage sector are expected to assist the Saudi residential market in the long run.

Despite the COVID-19 Pandemic, the residential real estate sector has remained resilient

Following the coronavirus outbreak, residential real estate prices climbed in 2020, as demand for dwelling units remained high. Even during the ongoing pandemic, the residential property market outperformed the commercial sector, with the price index for the residential sector growing over the previous year through Q1 2021.

The residential sector’s forecast for 2022 remains favorable, thanks to continuing government backing for the industry as part of Saudi Vision 2030’s ambitions.

The Housing Market in Saudi Arabia Will Be Boosted Even More by Government Reforms

The Real Estate Development Fund (REDF) of Saudi Arabia has been a crucial driver of growth in the Kingdom’s housing sector development, as outlined in the Vision 2030 framework.

The REDF, in collaboration with the Ministry of Housing and other government agencies, has announced a number of measures aimed at boosting residential real estate demand in the Kingdom and ensuring that Saudi people have access to affordable housing.