New policies established by the Saudi Arabian government have created a unique environment for explosive real estate market growth.

1. SAUDI ARABIA POISED TO
EXPERIENCE MAJOR REAL ESTATE
MARKET GROWTH

2. • The coronavirus pandemic has impacted real estate markets across the
world, and those in the Middle East were among the ones hit the
hardest. However, recovery has happened quickly, and a new report
points out that prices have bottomed out throughout the region, with
transaction volumes eclipsing those seen in the year before the
pandemic.
• One nation that has had an impressive recovery in its real estate sector
is Saudi Arabia, which rebounded largely due to government
intervention. Programs meant to make it easier to afford a mortgage
have resulted in significant growth throughout the nation.

3. GROWING COMPETITION IN THE
SAUDI REAL ESTATE MARKET
• One of the major drivers of growth in the nation is Vision 2030, a
project undertaken by Crown Prince Mohammed bin Salman to
expand business throughout the kingdom. This initiative has created
many new opportunities for local real estate developers while also
globalizing the Saudi market and inviting international investors to
participate. The result is a more competitive market in which domestic
developers must contend with international investors during a time of
significant expansion.
• While Vision 2030 is expected to drive an incredible demand for new
real estate projects, part of this initiative requires foreign companies
working with the Saudi government to relocate their head offices to
the kingdom. This, in turn, will help drive demand for new office
buildings.

4. GROWING COMPETITION IN THE
SAUDI REAL ESTATE MARKET
• In many ways, this new competition will drive the modernization of the
Saudi real estate market. Domestic developers must adopt international
standards and practices to remain competitive in a market that is appealing
to foreign investors. Industry experts believe that the Saudi market is in the
early stages of a boom, and many investors may soon scramble to
undertake projects in Riyadh and get involved with the massive new
projects underway in the nation, including NEOM, Qiddiya, and Amaala.
• Meanwhile, introducing a new, international standard will help modernize
the market and continue to attract new investment both domestically and
internationally. This modernization will only solidify confidence in the
market and continue to draw more attention and investment in the years
leading up to Vision 2030.

5. CONTINUED SUPPORT FOR NEW SAUDI
HOMEOWNERS
• For its part, the Saudi Arabian government is continuing its support of
the housing market and making it easier for Saudi nationals to
participate. The Sakani housing program, which helps first-time
homebuyers in Saudi, provided more than $195 million in July 2021
through the Ministry of Municipal and Rural Affairs and Housing and
the Real Estate Development Fund. This represents a significant
increase in the amount of funding offered through the same program
only a year earlier. The government expects this assistance to continue
increasing steadily over the coming few years.

6. CONTINUED SUPPORT FOR NEW SAUDI
HOMEOWNERS
• Notably, this increase in support comes at a time when the cost of
support has decreased. Interest on loans has fallen in the past three
years, and government organizations continue to negotiate with
lenders to ensure people have access to low rates. These negotiations
help the Sakani housing assistance go even further for people
purchasing homes for the first time. The Saudi government also
recently approved nine new housing projects totaling more than 16
million square meters. With locations in Riyadh, Al Qassim, Asir, Tabuk,
and Makkah, these projects will help ensure that supply can keep up
with demand as interest rates decrease and funding assistance
increases.

7. SAUDI FIRMS STEP UP TO SUPPORT REAL
ESTATE MARKET GROWTH
• Some Saudi firms are already stepping up to ensure housing supply
keeps up with growing demand. Recently, one of the largest investment
and property companies in Saudi Arabia, Innovest Property Co.,
launched the Al-Ahssa Real Estate Investment fund with Blominvest. This
fund has a total of $200 million invested.
• Innovest previously developed residential communities in Al-Bayraq that
provided more than 1,000 housing units to the Sakani program. The new
fund is a closed, private investment vehicle under the Shariah
Supervisory Board and the Saudi Capital Market Authority. Through the
fund, Innovest plans to invest in Al-Ahsa and develop a raw plot of land
in the southwest part of the city. The development will include both
commercial and residential space.

8. SAUDI FIRMS STEP UP TO SUPPORT
REAL ESTATE MARKET GROWTH
• The Saudi government is also incentivizing companies to get more
involved in real estate development. Recently, the government enacted
a policy stating that any company listed on the Saudi Stock Exchange
Tadawul will automatically receive the Real Estate Development
Program qualification certificate. With this certificate, companies can
sell off-plan properties through an agreement between the Saudi
Tadawul Group and the Off-Plan Sales or Rent Program.
• This new policy is expected to drive many new initial public offerings
(IPOs) in the coming year, which will help raise more money for real
estate developers. In turn, it could spur even more development, both
through funds raised during an IPO and those generated by off-plan
sales.