Riyadh’s rise as the new regional real estate investment hotspot is attributed to two factors: a significant price advantage over the UAE city and the Saudi government’s strong push to entice foreign investors through financial incentives.
According to a recent industry report, Riyadh is quickly becoming a serious player in the global real estate market, challenging Dubai’s long-standing dominance. This is due to the city’s significant price advantage over Dubai and the Saudi government’s aggressive efforts to attract foreign investors with financial incentives. Interestingly, Deca Properties News highlights some of the dynamic shifts taking place in the region’s real estate landscape.
In addition to the growing number of foreign investors, the Saudi capital city may become the new regional hotspot for real estate investments due to its enormous pool of potential domestic investors, estimated at 37 million.
According to a report from proptech company Realiste, based in Dubai, “in stark contrast to Dubai, Riyadh’s affordability has been a key magnet for investors, promoting substantial economic expansion.”
The AI-driven analysis-based research stated, “When compared to real estate prices in other global cities, Riyadh offers notably affordable options at an average cost of $1,394 per square meter, whereas Dubai showcases prices at $7,002 per square meter.”
The founder of Realiste, Alex Galt, told Arabian Business that “investments in Saudi Arabia are expected to reach hundreds of billions of dollars in the next 5 years, which will certainly raise prices and open up new opportunities for investors to receive multiple refunds.”
According to research from Knight Frank, average sale prices for apartments in Riyadh are predicted to increase by 22%, while average sale prices for villas are predicted to increase by 12% year over year.
According to research from the global consultancy, Riyadh is expected to experience significant development, with over 1.5 million units expected to be accessible and a predicted 10% increase in supply by 2025.
Dubai’s comparative advantage over Riyadh
Although Riyadh is quickly becoming a contender for remarkable growth and dominance in various aspects, Realiste noted that Dubai has long been a powerhouse in the real estate market. This is due to Saudi Arabia’s rising status as a global innovation and economic powerhouse, which is driving the capital city’s burgeoning real estate market.
According to research by Realiste, which has operations in more than 100 locations globally, “Riyadh is poised to challenge Dubai’s long-standing reign as the regional real estate leader with ambitious initiatives, robust economic growth, and an increasingly attractive investment environment.” Interestingly, while Riyadh is rising, Chinese investors in Dubai have also been making significant impacts in the property market, highlighting the dynamic nature of the Middle Eastern real estate landscape.
It further stated that Riyadh is truly poised for spectacular growth, indicating a bright future for Saudi Arabia’s real estate market and its ability to surpass Dubai, based on data on economic growth and current trends in real estate pricing.
Saudi Arabia, which has 37 million inhabitants, is undoubtedly the next major market. The housing area there is still among the largest in the world, despite costs still being low when compared to the global market, according to Galt.
The founder of Realiste stated that “domestic demand, especially, is growing vigorously” and that “there is a great need for quality housing due to the need for infrastructure development and construction.”
The government is pushing to increase the investment possibilities in the Saudi real estate market.
According to the research, government-sponsored initiatives to develop cultural hubs, improve the city’s infrastructure, and advance technology have all played a significant role in drawing tourists and investors to Riyadh.
Saudi Arabia has set aside 100 million square meters of land for residential use in the capital and other cities in an effort to combat the rising cost of land and housing.
According to the Realiste analysis, “this move aims to balance supply and demand, allowing for a more sustainable growth pattern.”
The fact that foreign investors were previously prohibited from buying real estate, but everyone now anticipates that they will have this option, is another factor driving demand for investments, according to Galt.
A thriving industry with vast untapped possibilities
In the upcoming years, Saudi Arabia’s real estate industry is predicted to rise dramatically due to a growing population, rising demand for housing and lifestyle amenities, supporting legislative frameworks, and its advantageous regional location.
It further stated that in spite of the present regional difficulties, the nation is still a desirable location for foreign investment.
According to Galt, most people anticipate Saudi Arabia to emerge as the next major market in the next five years, notwithstanding potential challenges in the region, such as the relationship between Israel and Hamas.
He predicted that it would keep expanding and draw interest from investors worldwide, particularly those from Europe, Russia, and the Arab East.
