https://arab.news/r6qaj
RIYADH: Saudi Arabia’s capital Riyadh is poised for significant population growth, with the number of residents projected to rise from 7 million in 2022 to 9.6 million by 2030, according to a new report.
London-based real estate consultancy Knight Frank projects that the city’s population will comprise 4.1 million Saudis and 5.5 million expatriates by the end of the decade, marking a 38 percent increase driven by a compound annual growth rate of 4.1 percent.
This will drive a need for 305,000 additional housing units for Saudi nationals between 2024 and 2034, driven by household formation, increased homeownership, and internal migration from other regions.
The forecast predicts greater growth than envisaged by World Population Review, which in April used UN figures to put Riyadh’s 2030 population at 8.5 million.
The Knight Frank report anticipates a significant rise in the expat population in Riyadh, which on current figures makes up approximately 52.3 percent of the city’s total population.
It projects an increase of 1.85 million expats by 2030, followed by an additional 2.3 million by 2034. As a result, the ratio of Saudi nationals to non-Saudis is expected to decline from 0.92 in 2022 to 0.75 by 2030.
This shift is primarily driven by the rising demand for expat workers needed to support the construction of large-scale developments and manage the new facilities in Riyadh.
Estimating housing demand from this group is challenging due to variations in household sizes, according to Knight Frank, but 77 percent of expats indicated a desire to own their homes in a previous survey conducted by the firm.
Riyadh’s growth is underpinned by Saudi Arabia’s Vision 2030, which aims to diversify the economy and increase global investments. Currently, Riyadh makes up 21.8 percent of the Kingdom’s total population, with 17.8 percent of Saudi nationals living in the capital.
With the Regional Headquarters Program encouraging multinational companies to relocate their regional operations to Saudi Arabia, Riyadh has naturally become the focal point for economic activity.
This initiative, combined with significant infrastructure and urban development projects, is driving both the expatriate and Saudi populations to rise.
Major projects, such as the New Murabba and Diriyah Gate, are further establishing Riyadh as the center of Saudi Arabia’s transformation.
Riyadh is also gearing up for Expo 2030 and World Cup 2034, which will see the construction of eight out of 11 new stadiums. To support this growth, the King Salman International Airport will be established, along with Riyadh Air, connecting the capital to 100 global cities.
According to the Ministry of Investment’s latest report, the capital led foreign direct investment inflows in 2023, attracting SR33 billion — positioning Riyadh as the leading administrative region.
This growth reflects the city’s role as both the Kingdom’s political and economic powerhouse, where investor confidence is bolstered by large-scale developments and strategic government initiatives.
With 62 percent of the population under 30 according to Knight Frank, the city is focused on providing new housing, employment opportunities, and recreational options to meet the demands of its young and rapidly growing demographic.
Riyadh’s workforce to expand by 39 percent by 2034
Knight Frank forecasts the number of working-age Saudi nationals in Riyadh will increase by about 1 million over the next decade, reaching 4.2 million, which corresponds to a compound annual growth rate of 2.8 percent.
If internal migrants relocate to Riyadh for work, this could add another 275,000, resulting in a total workforce growth of 36 percent.
As of the first quarter of 2024, the employment-to-population ratio for working-age Saudi nationals is 54.3 percent, suggesting that around 510,000 new local employees may enter the workforce by 2034.
With an estimated existing workforce of 1.7 million Saudis in the region, overall growth could yield an increase of 16 percent to 23 percent by 2030 and 29 percent to 39 percent by 2034, depending on the scale of internal migration.
During this recent period, new workforce entrants were primarily absorbed by the private sector and government-related entities, while employment in the civil service has remained stable, the report said.
According to latest figures from the World Bank, female labor force participation has reached 34.5 percent, exceeding the Vision 2030 target of 30 percent and prompting a new goal of 40 percent by 2030.
Both government and private sectors are implementing legal reforms and initiatives to empower women, with programs focusing on women’s roles in economic development.
Companies such as Red Sea Global are prioritizing gender diversity, with women occupying significant positions across various departments.
Meeting future demand
Riyadh’s new housing supply comes from four main sources, including the Ministry of Housing, which oversees affordable projects through the National Housing Company and private firms.
There are also government developments led by the Public Investment Fund and Roshn, private sector initiatives from real estate companies, and self-development by families purchasing land for construction.
Currently, about 330,000 housing units have been announced by government-related entities.
The projected demand from Saudi nationals is estimated at 220,000 units from 2024 to 2030 and 305,000 units from 2024 to 2034, suggesting that current construction efforts align with expected housing needs.
Knight Frank reported that significant commercial real estate development is underway in Riyadh to support a projected 32 percent increase in office space and a 24 percent rise in retail space by 2030, driven by an expanding workforce and a growing expat population.
The urgency for new projects across sectors like financial services, transport, storage, and ICT is underscored by tight market conditions.
Riyadh accounts for 30 percent of Saudi Arabia’s financial and business services output and 39 percent of transport, storage, and ICT output, reinforcing its status as a key hub for innovation and economic activity.