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Saudi Arabia: Where can expats purchase a home within a $1 million budget?

Are you an expatriate investor with a $1 million budget looking to purchase a home in Saudi Arabia? Look no further, as we help you navigate the process of buying a home in this thriving market

Saudi Arabia: Where can expats purchase a home within a $1 million budget?
Beautiful Sunrise view at Dammam Al Khobar Corniche Saudi Arabia.

In the last one year, the kingdom has seen an increase in its ambitions, awarding close to $250 billion in construction contracts for the $1.3 trillion worth of infrastructure and real estate projects announced since 2016. There is a noticeable momentum building as the country works towards meeting the Vision 2030 deadline, marking the beginning of several transformative phases as Saudi Arabia establishes itself as a prominent global economic force.

Hence, as Saudi Arabia undergoes a significant transformation, the real estate market presents a burgeoning opportunity for investors, especially, for expatriates with a budget of $1 million. Hence, in this article, we will explore the current state of the real estate market, the process of buying property as a foreigner, and the best areas to consider, supported by insights from our signature report, Destination Saudi 2024.

The current state of the real estate market

Saudi Arabia’s real estate market is experiencing unprecedented growth, driven by ambitious projects and government initiatives. The Public Investment Fund (PIF) has launched a series of real estate development companies aimed at creating destinations across the kingdom. This includes 17 gigaprojects that will collectively deliver approximately 930,000 residential units, with notable contributions from NEOM (300,000 units) and ROSHN (400,000 units).

Moreover, the Ministry of Municipal and Rural Affairs and Housing (MOMRAH) is focused on middle-income housing, targeting a 70 per cent homeownership rate among Saudis by 2030, up from the current 64 per cent. This national drive is complemented by opportunities for expatriates, who have historically been allowed to buy property for personal residence, now facilitated by quicker approval processes via the Abshir app.

The process of buying property in Saudi Arabia for foreigners

For expatriates, the process of purchasing property in Saudi Arabia has become more streamlined. Foreigners need to obtain special approval from the Ministry of Interior, which, thanks to digital advancements, now takes between one to three months. Additionally, the introduction of the Premium Residency Visa allows foreigners to own property with a minimum real estate investment of approximately $1 million (SAR 4,000,000), provided the property is ready for occupancy and purchased without financing.

Foreign investors can apply through the Premium Residency Centre (my.gov.sa), enabling property ownership even without the $1 million (SAR 4,000,000) investment, provided they hold a Premium Residency visa.

Property options available for $1 million and important areas to consider

With a $1 million budget, expatriates can explore a variety of properties in several prime locations. According to the Destination Saudi 2024 Report, 77 per cent of expats express a desire to own property in the kingdom, with Riyadh being the top choice (44 per cent), followed by Jeddah (24 per cent), and Dammam and Makkah (11 per cent each).

Additionally, when expats consider purchasing a property in a residential community, the most desired features are on-site necessities such as a supermarket, clinic, and dry cleaners (33 per cent), followed by management services like maintenance, security and reception (30 per cent), and transportation facilities including bike storage, dedicated parking, and access to public transportation (27 per cent).

In Riyadh, developers like First Projects and Jadwa Al Basateen offer premium-priced units that fit within this budget. The city’s dynamic growth and modernisation make it a top investment spot. Jeddah, with projects like Raffle Residences by Erth, also presents lucrative opportunities, especially for those looking for branded residences, a growing segment in the Saudi market.

In the Eastern Province, Ajdan’s developments cater to high-end buyers, while in the holy cities of Makkah and Madinah, foreign ownership is facilitated through 99-year leasehold periods. Projects like Jabal Omar and Rua Al Madinah are attracting significant investment from high-net-worth individuals (HNWIs).

Investment potential

The demand for branded residences as an asset class is increasing in Saudi Arabia. Luxury vacation destinations in the kingdom are swiftly incorporating branded residences into their development strategies. For instance, the Red Sea Project is anticipated to feature up to 1,000 branded residential units by 2030. Based on our survey findings, 68 per cent of expatriates have shown interest in buying a branded residence in Saudi Arabia, with 27 per cent indicating a strong likelihood of making a purchase.

Additionally, the market for these properties is set to grow by 120 per cent in the next three to five years, driven by a projected 37 per cent increase in HNWIs and a 10 per cent rise in ultra-high-net-worth individuals (UHNWIs) by 2027. With a national market size of 4,000 units projected for 2024-2027, the potential for sustainable returns is significant.

Conclusion

Looking ahead, Saudi Arabia’s real estate market is poised for continued expansion. The kingdom’s population, including expatriates, is expected to reach 40 million by 2030, driving demand across all asset classes. The government’s focus on infrastructure and residential development, coupled with favourable policies for foreign investors, creates a conducive environment for investment.

From the growing urban landscapes of Riyadh and Jeddah to the culturally rich areas of Makkah and Madinah, the kingdom presents a varied selection of investment possibilities. Supported by government initiatives and a strong economic forecast, investing in Saudi Arabia’s real estate market is a promising endeavour for those interested in tapping into this rapidly advancing market.