Saudi Real Estate Backed by $6.3bn Global Capital Inflow - Report

Riyadh, Saudi Arabia: Saudi Arabia’s real estate market continues to demonstrate resilience, supported by strong structural fundamentals and sustained investor interest, with $6.3 billion in private global capital ready to enter the market once geopolitical conditions stabilise.

According to Knight Frank’s Destination Saudi 2026 report, the Kingdom’s property sector remains underpinned by long-term growth drivers despite ongoing regional uncertainty.

Faisal Durrani, Partner – Head of Research, MENA, noted that despite the human and economic impact of conflict in the Middle East, GCC governments have demonstrated strong resilience and stability.

He highlighted that Saudi Arabia’s property market continues to benefit from key structural drivers, including population growth, capital inflows, business expansion, and inward migration.

Durrani added that investor sentiment remains intact, with any slowdown in activity likely to be temporary as markets adjust to geopolitical developments.

Landmark reforms unlock international demand

A significant milestone for the Saudi real estate sector came on January 22, 2026, when the Kingdom officially allowed non-resident global property investors to enter the market.

The new ownership law enables foreign investors to acquire property in 170 designated areas, opening access to key markets such as Riyadh, Jeddah, Makkah, and Medina.

Durrani noted that the timing of this reform is particularly impactful, as several segments of the market approach new performance highs, with increasing demand already being observed from international buyers.

Prior to the onset of regional tensions, Knight Frank had identified $1.5 billion in private capital targeting the residential sector and a further $3.4 billion focused on branded residences.

Read more: Saudi Arabia Activates Law Permitting Foreign Ownership of Real Estate

Susan Amawi, General Manager, KSA, noted that while demand remains strong, affordability pressures have impacted transaction volumes in Riyadh, which declined by 55% over the past 12 months, with total sales values falling by 48%.

However, long-term demand fundamentals remain positive, with Riyadh expected to require more than 305,000 additional homes by 2034, and approximately 830,000 homes needed nationwide for Saudi nationals over the same period.

Amawi emphasised that the new ownership framework is expected to improve market liquidity and attract a broader base of international investors.

Knight Frank’s global research, based on a survey of 1,550 individuals across multiple markets, indicates strong international interest in Saudi real estate.

Riyadh remains the primary target for 55% of global investors, followed by Jeddah (46%), Medina (43%), Makkah (41%), and Dammam (22%).

Durrani highlighted that demand for property in the Holy Cities is driven by strong cultural and religious ties, with recent regulatory changes allowing international investors access to these markets for the first time.

Retail and lifestyle sectors drive commercial demand

Beyond residential real estate, Saudi Arabia’s retail and F&B sectors are attracting significant investor attention, supported by strong consumer spending and evolving lifestyle trends.

Consumer spending reached $418.6 billion (SAR1.57 trillion) in 2025, while more than 3.4 million square metres of retail space is scheduled for delivery by 2028.

Jonathan Pagett, Partner – Head of Retail Advisory, MENA, stated that the Kingdom’s retail sector is undergoing a structural transformation driven by experience-led destinations and changing consumer behaviour.

Demand remains strong, with occupancy rates averaging 93% in Riyadh, 88% in Jeddah, and 94% in the Dammam Metropolitan Area.

Branded residences and hospitality expand

Branded residences continue to emerge as a high-growth segment, with $3.4 billion in global private capital targeting the sector.

Currently, Saudi Arabia has approximately 1,685 branded residential units, with a further 1,900 units in the development pipeline across key destinations including Diriyah Gate and Jeddah.

At the same time, the hospitality sector is expanding rapidly, supported by the Kingdom’s target of attracting 150 million visitors annually by 2030.

Plans are in place to deliver approximately 358,000 additional hotel rooms nationwide, including 250,000 in the Holy Cities, reflecting the scale of anticipated demand.

Office sector reaches record performance

The office sector remains another key area of investor interest, with 34% of global investors identifying it as a preferred segment.

Grade-A office occupancy in Riyadh has reached 98%, placing the city among a limited number of global markets with near-full utilisation of prime office space.

Durrani noted that this supply constraint is creating opportunities for investors, particularly as demand continues to be driven by the Regional Headquarters (RHQ) programme.

Grade-A office rents reached $730 per square metre (SAR2,735 psm) at the end of 2025, reflecting a 9.7% year-on-year increase, while vacancy rates remain at just 2%.

Read more: Saudi Leads Prime Office Rental Growth as GCC Markets See Strong Demand

Despite short-term geopolitical considerations, Saudi Arabia’s real estate market continues to be shaped by strong structural drivers, policy reforms, and expanding investment opportunities.

With increasing international participation, growing demand across sectors, and a robust development pipeline, the Kingdom is positioned as one of the most dynamic and attractive real estate markets globally.