With unprecedented economic momentum and continued government support, Saudi Arabia's real estate sector continues to shine, attracting the attention of local and international investors and recording impressive results in the first quarter of 2025, according to a recent report by CBR, a global real estate consultancy. <The report reveals a strong performance for Saudi Arabia's real estate market during the first quarter of 2025, with the total value of real estate transactions reaching $29 billion, driven by a marked rise in demand for residential, commercial, and hospitality properties. This momentum is driven by a package of government support and regulatory initiatives, as well as rising investor confidence in the performance of the local economy.
Regulations to stimulate housing and control prices
<Among the most prominent government efforts in this context, the General Real Estate Authority is seeking to address the challenges of rental prices, by studying the imposition of rent caps, in addition to developing a white land fee system, which aims to increase supply and reduce monopoly.The Royal Commission for the City of Riyadh has also announced that it will develop a system of white land fees, which aims to increase supply and reduce monopoly. The Royal Commission for Riyadh City also announced plans to offer up to 40,000 affordable residential plots annually, in a move aimed at boosting real estate supply and balancing supply and demand in the residential market.
The Royal Commission for Riyadh City also announced plans to offer up to 40,000 residential plots annually at affordable prices.
Riyadh continues to attract foreign investment
Despite global economic volatility, the Kingdom has strengthened its position on the Kearney FDI Confidence Index, moving up to 13th place globally. Net FDI inflows grew by 37% in the third quarter of 2024, reaching SAR 16 billion, reflecting foreign investors" confidence in the Saudi business environment.
Despite global economic volatility, the Kingdom has strengthened its position on the Kearney FDI Confidence Index, moving up to 13th globally.
Office rents jump
Directly supported by Saudi Vision 2030 and economic diversification programs, Class A and Class B office rents saw a rise of 17% and 25%, respectively. Jeddah also recorded notable growth in Grade A office rents, especially given its proximity to major industrial centers, although supply remains limited in the short term.
.
Real estate finance boom
The real estate finance market continued to grow, with new home loans rising by 28.3% to reach SAR 8.91 billion. The report showed a gradual shift in residential demand patterns, with a greater demand for apartments rather than villas and townhouses, with residential prices continuing to rise, especially in Riyadh, which recorded the highest annual growth rate at 10.7%.
Riyadh's real estate finance market also continued to grow, with new residential loans increasing by 28.3% to reach SAR 8.91 billion.
Retail sales continue to rise
The Kingdom's retail sector recorded strong growth during the first two months of 2025, with total sales reaching SAR 116 billion, supported by population growth, rising tourist numbers, and changing consumer spending patterns, particularly in the food and beverage sector, which grew by 4% year-on-year.
Tourism Sector Achieves Historic Numbers
Saudi Arabia welcomed 30 million international visitors in 2024, an increase of 9.5% compared to the previous year, which contributed to raising the contribution of the tourism sector to 498 billion riyals, equivalent to 12.45% of GDP.
CBRE's report reported that Saudi Arabia welcomed 30 million international visitors in 2024, an increase of 9.5% compared to the previous year. The Kingdom is preparing to host huge international events such as Expo 2030 and World Cup 2034, which reinforces the need to expand the number of hotel rooms, which is expected to reach 426,000 rooms in the next few years.
