Saudi Arabia Faces Growing Demand for New Homes

Saudi Arabia's residential real estate sector is grappling with increasing demand for new housing, driven by a young population and government initiatives aimed at expanding homeownership. According to a recent study by global property consultancy Knight Frank, approximately 825,000 new homes will be needed between 2024 and 2030 to meet rising demand in the country.

This demand is largely driven by two factors: the government’s target of achieving a 70% homeownership rate by 2030, and the rapid growth in household formation. A large portion of the demand is coming from the country’s youthful population - 45% of Saudi nationals are under the age of 20, and 63% are under 30. Many of these young Saudis are expected to seek their own homes as they reach adulthood, whether as individuals or married couples.

To address the demand, the Saudi government launched the Sakani housing program. Established in 2018, the program aims to streamline access to homeownership for Saudi nationals. To date, more than 800,000 contracts have been signed, including agreements for ready-made homes, self-construction projects, off-plan properties and land for new developments. The program has also facilitated significant growth in mortgage financing, which has risen from SAR 121.9 billion in 2016 to SAR 662.4 billion by the second quarter of 2024.

In addition to its focus on affordability, the government has placed an emphasis on large-scale infrastructure projects. The National Housing Company (NHC) has announced plans for 200,000 new homes by 2025, with this number expected to rise to 300,000 by the end of the year. These new homes are part of broader community development plans aimed at addressing the housing shortage in urban areas.

Knight Frank’s report also highlights the scale of the housing market in Saudi Arabia, with more than 1 million homes either under construction or planned for delivery by 2030. The growing demand for housing is expected to remain concentrated in major cities such as Riyadh and Jeddah.

The Kingdom’s housing market is now facing significant pressure to deliver the homes needed to meet both current and future demand. With government-backed programs, increased mortgage financing, and large-scale developments, Saudi Arabia is working to address the growing gap between housing supply and demand.