According to Saudi Arabia Minister Faisal Al-Ibrahim, the Kingdom’s growing real estate industry is significantly boosting the Gulf country’s GDP.
Faisal Al-Ibrahim, Minister of Economy and Planning of Saudi Arabia, told Al-Arabiya Business that his government has made it possible for the private sector to concentrate on making high-quality investments in real estate development by creating an enabling environment.
The government’s larger attempt to stabilise the Riyadh real estate market coincides with those comments. Restrictions on land transactions and development in northern Riyadh were lifted as part of a set of measures announced by Crown Prince Mohammed bin Salman to combat rising land prices and rental costs.
The programme aims to improve housing accessibility, control market dynamics, and guarantee sustainable growth in the industry. It is based on research conducted by the Council of Economic and Development Affairs and the Royal Commission for Riyadh City.
Al-Ibrahim also emphasised in his remarks how crucial cost regulation is to bolstering the private sector, improving market competitiveness, and promoting long-term economic growth.
He stated about future laws and rules: “All legislative measures will be announced in due course, and their impact will be monitored in a structured and institutionalised manner to ensure they achieve the desired objectives.”
The goals of Vision 2030’s economic diversification are expected to propel the real estate industry’s future growth, per a recent report published by real estate services company JLL. The Kingdom’s non-oil sector is expected to grow by 5.8% in 2025, up from 4.5% in 2024, according to the firm.
According to the report, Saudi Arabia has a robust construction industry, with USD 29 billion in project awards in 2024. For the Kingdom to establish itself as a major international centre for business and tourism, a robust real estate market is essential.
The real estate market is expected to grow at an annual rate of 8% from 2024 to reach USD 101.62 billion by 2029.
JLL’s country head for Saudi Arabia, Saud Al-Sulaimani, highlighted that Vision 2030’s strategic diversification efforts are drawing in both domestic and foreign capital despite global economic challenges.
Reforms On The Way
The Real Estate General Authority CEO Abdullah Al-Hammad recently confirmed that the Kingdom’s government is studying the implementation of a cap on residential and commercial rent increases to tackle soaring prices.
Speaking to Al Arabiya, Al-Hammad said the initiative includes five key directives, including the finalisation of a new White Land Tax law aimed at boosting housing supply and curbing the rise in property and rental prices.
“The Crown Prince’s directives focus on increasing supply by lifting development restrictions on the northern parts of the capital, releasing new plots, regulating lease agreements, and maintaining regular market oversight,” the REGA CEO noted.
Authorities recently approved lifting the ban on transactions — such as sales, purchases, subdivisions, and permits — for 81 million square metres of land in northern Riyadh. The move is designed to ease supply constraints and encourage new residential development.
The Royal Commission for Riyadh City has also been tasked with providing between 10,000 and 40,000 planned and developed residential plots per year over the next five years, based on demand. These plots will be offered at prices not exceeding SR1,500 per square metre to eligible citizens, including married individuals or those over the age of 25, with specific conditions prohibiting resale or transfer for 10 years unless for financing construction.
Other reforms include new regulations to govern landlord-tenant relations and ensure fair terms for both parties. REGA and the Royal Commission will also be responsible for monitoring property prices and submitting regular reports.