https://arab.news/pjhg6
RIYADH: The demand for residential real estate in Riyadh and Jeddah is projected to remain high due to the growing population, according to a new report.
Released by capital market economy firm S&P Global, the study said that expat inflows are one of the reasons for an average expected growth of 3.3 percent a year between 2024 and 2027.
Rental yields also remain high, with year-on-year growth in the first of half of 2024 coming it at 9 percent in Riyadh and 4 percent in Jeddah, the report underlined.
Saudi Arabia’s real estate is a vital element of the country’s economy, contributing around 7 percent of gross domestic product and supporting numerous additional sectors.
“We recently revised the outlook on our sovereign ratings on Saudi Arabia to positive from stable to reflect our view of the country’s strong outlook for non-oil growth and its economic resilience to volatile oil prices,” the S&P report said.
“Vision 2030 targets a 70 percent homeownership rate by 2030, and the country is on track to achieve this, with the rate hitting 63.7 percent at the end of 2023, according to the Ministry of Municipal and Rural Affairs,” the release added.
The analysis further showed that new residential units and mortgages will continue to rise in 2024, keeping with the country’s homeownership target.
It also highlighted that visa policy reforms and regulatory changes could boost direct foreign investment in the property sector.
However, the report said that private real estate developers face significant challenges, including mounting construction costs and competition for financing from other Vision 2030 projects.