Saudi real estate update: Interest in home buying flops from 84% to 40%

Saudi real estate update: Interest in home buying flops from 84% to 40%

Interest in home ownership in Saudi Arabia has flopped from 84% to 40% in just one year amid rising house prices and changing market dynamics.

Knight Frank said there had been a substantial contraction in residential real estate activity, shaped by factors including a more mobile population of young Saudi citizens and buyers taking longer to save larger deposits to buy a home.

Faisal Durrani, Knight Frank’s head of Middle East research said the volume of residential transactions in the kingdom has continued to decline, falling by almost 57% in Riyadh and 67% in Jeddah on an annualised basis as at the end of Q1 2023.

“The 40% growth in villa prices during 2022 and 50% growth in apartment values in Riyadh, for instance, has undoubtedly dented buyer demand as households are forced into a holding pattern while they save increasingly larger deposits,” he said.

As well as prices, it is also likely that many of those planning to transition from renting to owning have already done so, as the country moves closer to its target of 70% ownership under Vision 2030, now standing at 67%.

“Another emerging, but overriding, factor to consider is around domestic migration. Young Saudis – 56% of the population is