The ultimate guide to investing in Saudi Arabia real estate

Learn more about Destination Saudi Arabia by Knight Frank

At Knight Frank MENA, we've witnessed remarkable transformations across the Middle East's real estate landscape over the past 12 years. However, few developments have captured our attention quite like the unprecedented surge in demand for luxury properties to invest in Saudi Arabia. Our latest flagship research initiative, Destination Saudi Arabia, reveals compelling insights that position the Kingdom as the next major destination for international Muslim high-net-worth individuals (HNWIs) and expatriates seeking premium real estate opportunities.

Our detailed 2024 report shows a market that is experiencing a dramatic transformation. As Vision 2030 continues to spur unprecedented urbanization and lifestyle changes, Saudi Arabia has transformed into a modern destination that competes with established regional centers. The most interesting aspect of this transformation is the particular attraction it has to Muslim investors and expatriates who do not only see the Kingdom as an investment destination, but also as a cultural and spiritual home.

Understanding the Destination Saudi Arabia Report

Our Destination Saudi Arabia report represents one of the most comprehensive analyses of the Kingdom's evolving real estate landscape. We designed this research initiative to capture the pulse of demand from two critical market segments: international Muslim HNWIs and Saudi-based expatriates.

The scope of our research encompassed over 500 international Muslim HNWIs from nine countries, alongside 240 Saudi-based expatriates. This dual approach allowed us to understand both the external investment appetite and the internal market dynamics driving residential, branded, and hospitality real estate demand.

Our methodology focused on identifying purchasing preferences, investment timelines, budget allocations, and the specific factors that influence decision-making among these sophisticated buyer groups. The results have exceeded our expectations, revealing a market primed for significant growth and investment opportunities.

Key Market Insights: A Surge in Demand

The Expatriate Market: Ready to Invest

The expatriate community within Saudi Arabia represents one of the most compelling buyer segments we've encountered. Our research uncovered that 77% of expats surveyed expressed genuine interest in purchasing residential property in Saudi Arabia. This figure becomes even more striking when we examine younger demographics, with 85% of expats under 35 years old showing strong purchase intent.

What particularly caught our attention was the timeline preference among these potential buyers. Most expats prefer to purchase homes within the next 12 to 24 months, reflecting what we interpret as a "wait and see" approach. This cautious optimism stems from recent house price increases, but also indicates a market that's carefully evaluating opportunities rather than rushing into purchases.

The financial implications of this demand are substantial. Based on our survey findings, expat respondents expect to spend a combined SAR 630 million on branded residential assets alone. This figure represents just the tip of the iceberg, as it focuses solely on one property category within a single buyer segment.

International Muslim HNWIs: Seeking Sacred Connections

Our survey of international Muslim HNWIs revealed fascinating preferences that extend beyond traditional investment considerations. The holy cities of Mecca and Madinah feature prominently in their purchasing decisions, with 30% of HNWIs expressing interest in Mecca and 19% in Madinah. This spiritual connection creates a unique dynamic in the Saudi real estate market that doesn't exist in other regional destinations.

Riyadh maintains its position as a commercial hub, attracting 25% of HNWI interest, while NEOM continues to captivate buyers with its futuristic vision. Remarkably, 84% of global Muslim HNWIs expressed interest in purchasing property in one of the holy cities, highlighting the deep cultural and religious ties that transcend purely financial motivations.

The Rise of Branded Residences

One of the most significant trends we've identified is the growing appetite for branded residences. This represents a sophisticated evolution in buyer preferences, with 68% of expat buyers expressing likelihood to purchase branded residences. The demographic driving this trend is particularly interesting: millennials and high earners with household incomes above SAR 40,000 per month are leading this charge.

Branded residences offer several advantages that appeal to discerning buyers. They provide consistent service standards, professional management, and often include amenities and services typically associated with luxury hospitality. For families, these properties offer peace of mind through established operational frameworks and quality assurance.

Our research indicates that 73% of buyers with families prefer branded residences for long-term living, while 52% are interested primarily for investment purposes. This dual appeal, as both lifestyle choice and investment vehicle, positions branded residences as a particularly attractive segment within the Saudi market.

The geographic preferences for branded residences further illuminate market dynamics. Riyadh leads with 48% of buyer interest, followed by Jeddah at 33%, and NEOM at 29%. These preferences reflect the balance between established commercial centers and emerging lifestyle destinations.

Dubai's Continued Influence and Saudi Arabia's Emergence

As property consultants with deep regional expertise, we recognize that Dubai remains a crucial hub for Middle Eastern real estate investment. However, our research reveals an interesting dynamic: Dubai's success has actually paved the way for Saudi Arabia's emergence as a complementary destination rather than a competitor.

Many of our clients view Dubai and Saudi Arabia as part of a broader regional portfolio strategy. Dubai offers established infrastructure, proven rental yields, and a cosmopolitan lifestyle, while Saudi Arabia presents new opportunities tied to Vision 2030's transformative projects and the cultural significance of the Kingdom for Muslim investors.

The relationship between these two markets is symbiotic. Dubai's success in attracting international investment has demonstrated the region's potential, while Saudi Arabia's unique cultural position and massive development pipeline offer diversification opportunities that weren't previously available.

We've observed that many investors who initially entered the regional market through Dubai are now exploring Saudi opportunities as their next strategic move. This progression reflects growing confidence in the broader GCC real estate sector and recognition of Saudi Arabia's unique value proposition.

Knight Frank MENA's Strategic Position

Over our 12 years of operation in the region, we've built our reputation on understanding the nuances that drive Middle Eastern real estate markets. Our approach to the Saudi market reflects our core mission: to consistently deliver value and exceed expectations by putting our clients' interests first.

Our expertise in Saudi Arabia extends beyond traditional transactional services. We provide strategic advisory services that help clients navigate the regulatory landscape, understand cultural considerations, and identify opportunities that align with their investment objectives. This holistic approach has proven particularly valuable for international Muslim HNWIs who appreciate our understanding of both financial and cultural factors.

We've developed specialized knowledge in branded residences, having advised on numerous projects across the region. Our experience with similar developments in Dubai and other GCC markets positions us to guide clients through the emerging Saudi branded residence sector with confidence and insight.

Our local team combines international standards with regional expertise, ensuring that clients receive world-class service while benefiting from deep local knowledge. This combination has proven essential in a market where cultural sensitivity and technical expertise must work in harmony.

Investment Drivers and Market Fundamentals

Several key factors drive the growing interest in luxury properties to invest in Saudi Arabia. Vision 2030 serves as the primary catalyst, with its focus on diversifying the economy and creating new lifestyle destinations. The introduction of premium residency options, including property-ownership-linked visas, has removed significant barriers that previously limited foreign investment.

The quality and design of new developments have reached international standards, with many projects featuring renowned architects and designers. Service quality has become a key differentiator, with developers recognizing that today's buyers expect hospitality-level amenities and management.

Location remains crucial, with buyers prioritizing proximity to business districts, international schools, and cultural amenities. The Kingdom's investment in infrastructure, including the expansion of airports and transportation networks, has improved connectivity and accessibility for international buyers.

Regional Context and Future Outlook

Our analysis suggests that Saudi Arabia's real estate market is entering a maturation phase that mirrors Dubai's evolution over the past two decades. The combination of government support, regulatory improvements, and genuine buyer demand creates a foundation for sustained growth.

The holy cities represent a particularly unique opportunity, as they offer investment potential that exists nowhere else in the world. The combination of religious significance, government investment, and growing accessibility creates a market dynamic that transcends traditional real estate considerations.

NEOM and other mega-projects represent the Kingdom's ambition to create new lifestyle destinations that appeal to international buyers. While these projects are still developing, early interest suggests strong long-term potential for investors willing to take a forward-looking approach.

Navigating Your Saudi Arabian Investment Journey

The data from our Destination Saudi Arabia report confirms what we've observed through our client interactions: Saudi Arabia represents a compelling opportunity for investors seeking to diversify their Middle Eastern real estate portfolios. The combination of cultural significance, government support, and emerging lifestyle destinations creates a unique value proposition.

For international Muslim HNWIs, the Kingdom offers the rare opportunity to invest in a market that aligns with both financial objectives and cultural values. The emphasis on holy cities, combined with world-class development standards, creates investment opportunities that simply don't exist elsewhere.

For expatriates already living in Saudi Arabia, the market offers the chance to transition from rental to ownership in a country that's rapidly developing its residential infrastructure. The preference for branded residences among this group reflects their desire for international standards combined with local convenience.

As your trusted partner in Middle Eastern real estate, we're uniquely positioned to help you navigate these opportunities. Our comprehensive understanding of both the Saudi market and the broader regional context ensures that your investment decisions are informed by the most current market intelligence and strategic insights.

Whether you're considering your first Saudi Arabian investment or looking to expand an existing regional portfolio, our team stands ready to transform your property objectives into successful realities. The Kingdom's transformation is creating opportunities that won't remain available indefinitely, making now an optimal time to explore what Saudi Arabia can offer your investment strategy. Contact us to get started today!