Young Population Driving Demand for Housing- Saudi Arabia
Saudi Arabia is aiming to increase its homeownership rate to 70% by 2030, up from the current 63.7%. To achieve this ambitious target, the country will need to construct around 115,000 homes each year over the next six years. With a significant portion of the population under 20 years old, demand for housing is surging, creating considerable pressure on developers.
“There is a huge amount of demand for homes from a young population and huge amount of pressure to deliver,” says Christopher Payne, partner and chief economist for MENA at Knight Frank.
Impact of Population Growth and Economic Relocation on Housing
The report from Knight Frank highlights that housing demand is estimated at 825,000 units, with Riyadh alone accounting for 35% of this demand. The capital’s appeal has been amplified by companies relocating regional headquarters to the city, driving up rental prices by 35% over the past three years.
The Saudi Arabia government’s Sakani program, which includes social housing, has processed over 883,000 applications for affordable homes. In response, the National Housing Company (NHC) plans to build between 200,000 and 300,000 units by 2025, contributing to the availability of more affordable housing.
Role of Foreign Investment and Large-Scale Developments
Knight Frank predicts that international developers will increasingly invest in Saudi Arabia’s housing market as they recognize the growing opportunities. With 1.04 million new homes under construction, large-scale projects such as New Murraba and Roshn are set to deliver both middle-income and luxury housing by 2030, diversifying the market offerings.
Surge in Mortgages and Vision 2030
In line with Vision 2030, Saudi Arabia has seen mortgages exceed 600 billion riyals, up from 200 billion in 2019. The government’s spending on this initiative highlights its commitment to diversifying the economy away from oil, making housing more accessible for its growing population.
