Saudi Arabia Residential Construction Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR | > 6.00 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Saudi Arabia Residential Construction Market Analysis
The Saudi Arabia Residential Construction Market is valued at about USD 37 billion and is expected to register a CAGR of more than 6% during the forecast period. The market is driven by the infrastructure and housing projects developing in the country. Furthermore, the market is driven by the increasing home ownership in the country.
- Despite global macroeconomic conditions, Saudi Arabia's construction industry continues to lead the MENA region. In 2022, the kingdom saw the highest value of project awards, demonstrating its commitment to driving economic diversification and transformation through its Vision 2030. The pipeline value of unawarded (pre-execution) projects in Saudi Arabia is estimated to be USD 1.1 trillion, which includes projects from the study stage to the main contractor bid. Approximately 70% of projects are in the 'construction' sector, with residential, cultural, leisure, and hospitality serving as sub-sector leaders, which is the driving force behind the Vision 2030 strategy. While the country's inflation forecasts are relatively soft in comparison to global averages, Saudi Arabia, like the rest of the MENA region, relies on importing construction materials from high inflationary countries, which affects construction material prices.
- The Kingdom of Saudi Arabia is experiencing an unprecedented construction and urban mega-project boom that will reshape the Kingdom's and the region's future. The Public Investment Fund, the Royal Commissions of the major urban areas, the related Ministries, and the private sector, which is driving the majority of projects and opportunities, are all funding mega public and private sector projects. Exhibitors offering resilient, sustainable building technologies and solutions will have unprecedented access to new projects worth more than USD 2.9 trillion. Since its inception, The Housing Program has focused on setting new standards for the development of the housing sector to provide citizens with a variety of housing options. This assistance will increase the number of Saudi families who own a home.
- The residential market was resilient during the pandemic, owing to strong demand fundamentals, and has seen a positive trend in KPIs in H1 2022. Apartment and/or smaller unit demand is increasing at a faster rate, owing to affordability, an influx of expatriates, and growing market acceptance for these types of units, particularly among Saudi households. The ongoing economic recovery, combined with improving demand drivers from various sectors, is expected to have a positive impact on the capital city's overall real estate market. Combining retail with other complementary real estate components such as entertainment, hotel, office, or residential could be a good idea for increasing footfall. The market's long-term outlook is likely to be positive, backed by the government's initiatives to increase the industry's contribution to the economy.
Saudi Arabia Residential Construction Market Trends
Increasing Home Ownership Driving the Market
- Saudi Arabia's housing demand is expected to rise by more than 50% by 2030, reaching 153,000 dwellings from 99,600 in 2021. To reach a housing stock of 4.96 million houses by 2030, the Kingdom will need to build approximately 1.2 million new homes over the next decade. In the last decade, Saudi Arabia has made remarkable progress in transforming its housing sector. By 2030, the Kingdom is expected to achieve its goals of 70% home ownership and a housing sector that contributes 8.8% of the national GDP. The government's robust policies and initiatives, including the activation of numerous financial products, are propelling the sector forward, addressing the housing market's key challenges, and making homeownership more accessible for new generations of Saudi Arabian people.
- Addressing the barriers posed by a high mortgage interest rate environment, the financing dimension directly addresses the issue of unaffordable housing through several number of government-backed initiatives. Access to long-term financing solutions remains critical, with the Saudi Real Estate Refinance Company (SRC) injecting more than 6.5 billion Saudi riyals by the end of 2020 and plans to refinance 20% of the Kingdom's residential mortgage market by 2025. The Saudi Central Bank has also played an important role in the sector's growth, with minimum down payment requirements for property purchases reduced from 30% to 5% of the purchase price and the number of banks offering home loans increasing. Aside from improving access to finance, the Kingdom has continued to increase the private sector's involvement, particularly in developing affordable housing.
Increasing Investment and Government Projects Driving the Market
- Improved governance contributes to the stabilization of the rental and buyer markets in real estate, which is aided by initiatives such as "Ejar," which governs the relationships between all parties involved in the rental process. The transformation of the Saudi housing market also focuses on improving beneficiaries' journeys. This dimension is critical for addressing low levels of customer satisfaction and includes several key initiatives such as the 'Mulak Programme,' 'Shrakat,' and 'Sakani.' These initiatives strengthen the government-private sector partnership to provide solutions and residential products that meet the needs of citizens at an affordable price, as well as to digitally enable Saudi homebuyers to apply for their first home online.
- The housing sector in the Kingdom's Eastern Province is currently receiving generous support. However, because providing suitable housing for residents is one of the leadership's top priorities, this support is more than justified. This is especially true as part of Saudi Arabia's ambitious Vision 2030 Housing Program. The housing program is critical in improving housing accessibility for Saudi families, both financially and in terms of overall feasibility. The project's second phase was launched for the Al-Wajiha suburb. Al-Wajiha is one of Saudi Arabia's largest residential suburbs, spanning more than 9 million square meters. The project will house over 27,000 people across 5,400 housing units within this large area.
- In Saudi Arabia, sustainable real estate provides investors with the opportunity to make a real difference in the world by investing in a greener future. Many businesses and industries are beginning to invest in green infrastructure as the world becomes more aware of the need to adopt sustainable practices. The real estate industry is no exception, with sustainable development becoming a key trend in new construction projects. In recent years, Saudi Arabia, in particular, has made significant investments in sustainable real estate development. Green buildings are seen as an important part of achieving the country's goal of using renewable energy for 15% of total power needs by 2030. As a result, the number has increased significantly of LEED-certified (Leadership in Energy and Environmental Design) projects in Saudi Arabia over the past few years.
Saudi Arabia Residential Construction Industry Overview
The Saudi Arabia Residential Construction Market is fragmented with many local and regional players with a few global players. Some of the major players in the market are Saudi Cyprian Construction CO. LTD., Saudi Constructioneers Ltd. (Saudico), Jabal Omar Development Company, Sedco Development, Al Bawani, and many more. There are many opportunities coming up because of the many projects coming up in the market. Furthermore, there are new partnerships emerging to deliver these projects thus there are ample opportunities for the companies in the market.
Saudi Arabia Residential Construction Market Leaders
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Saudi Cyprian Construction CO. LTD.
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Saudi Constructioneers Ltd. (Saudico)
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Jabal Omar Development Company
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Sedco Development
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Al Bawani
*Disclaimer: Major Players sorted in no particular order
Saudi Arabia Residential Construction Market News
- April 2023: Retal Urban Development Company, based in Saudi Arabia, has signed a conditional development agreement with the kingdom's National Housing Company (NHC) to build residential villas under the master plan of the East Albuhirat project in the port city of Jeddah. The East Albuhirat project would have 327 residential units spread across a total area of 98,098.55 sq m, according to Retal's application to the Saudi exchange Tadawul.
- December 2022: Ajdan, a leading mixed-use lifestyle developer best known for the Ajdan Waterfront in the kingdom's Eastern Province, and Roshn, a PIF-backed giga-project developer, have formed a partnership. The agreement calls for the construction of over 270 villas in Roshn's mixed-use community 'Sedra' in northeast Riyadh. Sedra, one of Riyadh's most anticipated developments, will include over 2,100 residential units as well as a slew of entertainment and commercial amenities such as public parks, entertainment areas, retail, community centres, schools, a sports hub, health clinics, a slew of restaurants and cafes.
Table of Contents
1. INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
2.1 Analysis Method
2.2 Research Phases
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS DYNAMICS
4.1 Market Overview
4.2 Market Dynamics
4.2.1 Drivers
4.2.2 Restraints
4.2.3 Opportunities
4.3 Industry Value Chain / Supply Chain Analysis
4.4 Porters Five Forces Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
4.5 Current Economic Scenario and Consumer Sentiment
4.6 Residential Real Estate Buying Trends - Socio-economic and Demographic Insights
4.7 Government Initiatives and Regulatory Aspects for the Residential Real Estate Sector
4.8 Insights into Size of Real Estate Lending and Loan to Value Trends
4.9 Insights into Interest Rate Regime for General Economy and Real Estate Lending
4.10 Insights into Rental Yields in the Residential Real Estate Segment
4.11 Insights into Capital Market Penetration and REIT Presence in Residential Real Estate
4.12 Insights into Affordable Housing Support Provided by Government and Public-private Partnerships
4.13 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)
4.14 Impact of the COVID-19 Pandemic on the Market
5. MARKET SEGMENTATION
5.1 By Type
5.1.1 Apartments & Condominiums
5.1.2 Landed Houses & Villas
5.1.3 Other Types
5.2 By Construction Type
5.2.1 New Construction
5.2.2 Renovation
5.3 By Key Cities
5.3.1 Riyadh
5.3.2 Jeddah
5.3.3 Dammam
5.3.4 Rest of Saudi Arabia
6. COMPETITIVE LANDSCAPE
6.1 Market Concentration Overview
6.2 Company Profiles
6.2.1 Saudi Cyprian Construction CO. LTD.
6.2.2 Saudi Constructioneers Ltd. (Saudico)
6.2.3 Nesma & Partners
6.2.4 Jabal Omar Development Company
6.2.5 Sedco Development
6.2.6 Al Bawani
6.2.7 Al Jaber Building (AJB)
6.2.8 Nesma United Industries
6.2.9 Kettaneh Construction
6.2.10 Jenan Real Estate Company
6.2.11 Abdul Latif Jameel Properties
6.2.12 Dar Al Arkan
6.2.13 Emaar
6.2.14 Almabani*
- *List Not Exhaustive
7. FUTURE OF THE MARKET
8. APPENDIX
Saudi Arabia Residential Construction Industry Segmentation
Construction on single-family or two-family homes that are utilised, are planned to be used, or are predominantly used for residential purposes is considered residential construction. A complete background analysis of the Saudi Arabia Residential Construction Market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact, is covered in the report.
The Saudi Arabia Residential Construction Market is segmented By Type (Apartments & Condominiums, Landed Houses & Villas, and Other Types), By Construction Type (New Construction, and Renovation), and By Key Cities (Riyadh, Jeddah, Dammam, and the Rest of Saudi Arabia). The report offers market size and forecast values (USD billion) for all the above segments.
| By Type | |
| Apartments & Condominiums | |
| Landed Houses & Villas | |
| Other Types |
| By Construction Type | |
| New Construction | |
| Renovation |
| By Key Cities | |
| Riyadh | |
| Jeddah | |
| Dammam | |
| Rest of Saudi Arabia |
Frequently Asked Questions
What is the current Saudi Arabia Residential Construction Market size?
The Saudi Arabia Residential Construction Market is projected to register a CAGR of greater than 6% during the forecast period (2024-2029)
Who are the key players in Saudi Arabia Residential Construction Market?
Saudi Cyprian Construction CO. LTD., Saudi Constructioneers Ltd. (Saudico), Jabal Omar Development Company, Sedco Development and Al Bawani are the major companies operating in the Saudi Arabia Residential Construction Market.
What years does this Saudi Arabia Residential Construction Market cover?
The report covers the Saudi Arabia Residential Construction Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Saudi Arabia Residential Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Saudi Arabia Residential Construction Industry Report
Statistics for the 2024 Saudi Arabia Residential Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Saudi Arabia Residential Construction analysis includes a market forecast outlook to for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
