Saudi Arabia's Residential Sales Surge To $32 Billion In 2024: New Market Report

The residential segment in cities like Riyadh, Jeddah, and the Dammam Metropolitan Area (DMA) witnessed a remarkable uptick, with transaction volumes and values increasing by about 50% from 2023 to 2024.

This growth reflects an expanding market maturity and a strategic development phase approach by property developers. The Deloitte report revealed that residential transactions in these areas hit 102,522 in 2024, amassing a total value of SAR 118 billion ($32 billion). Riyadh saw sales rates for apartments and villas rise by 5% and 12%, respectively, whereas Jeddah and DMA saw apartment sales grow by around 1% over the last year.

Deloitte has unveiled its latest overview of Saudi Arabia's real estate sector, showcasing a year of strong performance across all segments. The Kingdom's real estate market, backed by its ambitious Vision 2030, is predicted to see substantial growth leading up to 2025.

This surge is expected to be fueled by significant developments, including the hosting of Expo 2030 and the FIFA World Cup 2034™, as well as mega-projects like NEOM, the Red Sea Project, and Qiddiya, which are set to foster new urban centers and tourist hotspots.

Oliver Morgan, Partner and Head of Real Estate at Deloitte Middle East, stated, "Saudi Arabia's real estate sector is experiencing robust growth, driven by strategic government initiatives, strong economic fundamentals, substantial infrastructure investments and expanding international trade. These diverse growth drivers position Saudi Arabia as one of the region's most dynamic and promising real estate markets."

Morgan highlighted the Kingdom's focus on sustainable and smart development, the rising demand for luxury and mixed-use properties, and efforts towards affordable housing as key factors driving residential market transactions. Riyadh, in particular, is emerging as a central business hub, attracting significant foreign investment and reinforcing Saudi Arabia's position in the real estate market.

The office market in Saudi Arabia remains robust, buoyed by the Kingdom's thriving GDP, which is projected to reach SAR 3.7 trillion ($981 billion) by 2030. This economic strength translates into a sustained demand for office space, particularly in Grade A sectors such as financial and business services.

In 2024, Riyadh, Jeddah, and DMA collectively offered 6.4 million sqm, 2.2 million sqm, and 1.5 million sqm of office space, respectively. Noteworthy projects contributing to this supply include Laysen Valley and STC Square Phase 1 in Riyadh, alongside the extensive pre-leasing and leasing activity in the King Abdullah Financial District (KAFD).

Saudi Arabia's hospitality sector continues to flourish, with the Average Daily Rate (ADR) climbing to SAR 716 in 2024, a slight increase from the previous year. This growth is partly due to the Kingdom achieving its Vision 2030 tourism target of welcoming over 100 million tourists annually, well ahead of schedule.

Riyadh has particularly excelled, surpassing major global cities in ADR growth, thanks to strong corporate and leisure demand and successful events like Riyadh Seasons. Jeddah remains key to the tourism sector, with new developments expected to boost its standing as a premier tourism gateway, especially in anticipation of events like Expo 2030 and the FIFA World Cup 2034™.

The retail sector is also set for continuous expansion, with Oxford Economics predicting a CAGR of 4.4% from 2025 to 2027. The emphasis on creating retail spaces that offer integrated entertainment and immersive experiences reflects evolving consumer preferences. Despite a high supply, retail rents in Saudi Arabia saw a marginal increase in 2024, with new, diverse offerings gaining traction over older, standalone developments.

The warehousing and logistics sector in Saudi Arabia is poised for further expansion, thanks to various initiatives under Vision 2030, including the National Industrial Development and Logistics program and the establishment of Special Economic Zones.

Enhancements to the aviation infrastructure and an uptick in air cargo volume have also contributed to increased demand in this sector. According to the Saudi Port Authority, cargo throughput saw a 14% increase in 2024 compared to the previous year.

The National Investment Strategy underlines this growth trajectory, with projections indicating that Foreign Direct Investment (FDI) inflows will reach SAR 388 billion ($103.4 billion) by 2030, marking a CAGR of 22% from 2023's SAR 95.9 billion ($25.5 billion).

This optimistic outlook is supported by the Saudi government's launch of tax incentives, streamlined regulations, and the initiation of large-scale projects aimed at enhancing the Kingdom's real estate infrastructure.