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  Saudi Arabia’s housing boom risks leaving citizens behind

  23 October 2025

  Saudi Arabia is in the middle of one of the biggest housing drives in its history. Across Riyadh, Jeddah and the Eastern Province, entire neighbourhoods are taking shape, funded by government initiatives and ambitious developers. 

  The ambition is clear: raise living standards, push homeownership towards Vision 2030’s 70% target, and showcase modern Saudi life.

  But here is the uncomfortable reality: homes are being built, yet many Saudis cannot afford them.

  No one doubts the appetite for housing. Saudi families have always valued owning a home, and with such a young population, the demand is only growing. But affordability is slipping away.

  According to Knight Frank, the number of families planning to buy fell sharply, from 40% in 2023 to 29% in 2024. Prices keep climbing: in Riyadh alone, apartment values rose almost 11% last year, while villas increased even more. Salaries, however, have hardly moved. The result is a widening gap between what people want and what they can realistically buy.

  Wrong market

  Much of today’s housing pipeline is designed for the top end. Villas and apartments that are priced at SR2-SR4m ($533,333-$1.07m) are now common, while surveys show that two-thirds of Saudi households can only afford about SR1.2m or less.

  Developers understandably chase higher margins, building bigger homes with luxury finishes. But this leaves out the very group the government most wants to support: young, middle-income families. Land costs make the situation worse. Speculative buying has pushed land far out of reach, and those costs inevitably pass down to buyers.

  Imported designs

  International developers have entered the market with big ideas and sleek designs. Yet too often, their projects look as though they are meant for global investors or expatriates, not for Saudi households. Tower blocks and gated compounds may look impressive, but they do not always reflect local family life, or income levels.

  Then there is infrastructure. Building communities is not just about homes, but also schools, hospitals, roads, utilities and parks. Those upfront costs are huge, and developers usually recoup them through higher sale prices. Once again, it is the local buyer who feels the squeeze.

  Financing difficulties

  Rising mortgage rates add another hurdle. With the Saudi central bank following US interest rate moves, borrowing has become more expensive. What might have been an affordable monthly payment two years ago is now out of reach for many young families.

  Tower blocks and gated compounds may look impressive, but they do not always reflect local family life, or income levels

  Saudi Arabia is opening its property market to foreign investors. That brings in capital and supports diversification. But if supply for citizens is not guaranteed first, the risk is clear: locals may be priced out of their own housing market.

  The government is aware of these issues. The Ministry of Housing is rolling out schemes, financing tools and regulations. But more is needed. Policies must:

  • Match new homes to actual income levels, not just investor targets
  • Curb speculation and make land more accessible
  • Expand subsidised mortgages for first-time buyers
  • Open the market to foreigners gradually, after domestic needs are met.

  Inclusivity goal

  Housing is one of the most visible promises of Vision 2030. It symbolises progress, modernisation and opportunity. But unless the current course is corrected, many of these new developments could end up as exclusive enclaves rather than inclusive communities.

  Saudi Arabia has the money, the demand and the ambition. The challenge now is to connect all three, so that the homes rising across its skylines are not just impressive projects, but real homes that reflect the aspirations of ordinary Saudis.

  

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  MEED Editorial
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  Riyadh tenders Al-Zulfi passenger railway station

  22 October 2025

  Saudi Arabia Railways (SAR) has tendered a design-and-build contract for the construction of a passenger railway station in the Zulfi governorate, located 260 kilometres northwest of Riyadh.

  The station in Al-Zulfi will serve SAR’s North Railway line.

  According to the tender notice published on SAR’s website, the scope includes the construction of the station building, firefighting facilities, track works, signalling and telecommunication systems, utilities, access roads, parking, landscaping and other associated works.

  SAR has set 4 December as the deadline for firms to submit their bids.

  The passenger section of the North Railway – formerly known as the North-South Railway – extends over 1,250 kilometres.

  The line originates in Riyadh and runs northwest to Al-Haditha, near the Jordanian border, passing through Majmaah, Qassim, Hail, Jouf and Qurayyat.

  

  https://image.digitalinsightresearch.in/uploads/NewsArticle/14921216/main.jpg

  Yasir Iqbal
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  Procurement begins for $372m Rixos Alkhobar resort

  22 October 2025

  

   

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  Saudi Arabia’s Tourism Development Fund and US-based investment firm FTG International Group have invited companies to prequalify for a contract to develop a mixed-use resort at Half Moon Beach in Alkhobar, in the kingdom’s Eastern Region.

  “The prequalification process is ongoing and the project is likely to be tendered in a few weeks,” sources close to the project told MEED.

  The estimated SR1.4bn ($372m) project will cover an area of approximately 262,000 square metres.

  It will comprise 400 hotel units and 41 residential villas.

  The resort will operate under the Rixos brand and be fully managed by French hospitality firm Accor.

  UK-based analytics firm GlobalData expects Saudi Arabia’s construction industry to grow by 4% in real terms in 2025, driven by investments in housing, energy and transport infrastructure.

  The commercial construction sector is projected to grow by 3.7% in real terms in 2025 and maintain an average annual growth rate of 3.7% from 2026 to 2029. This is supported by Saudi Arabia’s Vision 2030, which aims to attract 150 million tourists annually and add 320,000 hotel rooms by 2030.

  

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  Yasir Iqbal
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  Saudi Arabia plans Mecca transit-oriented development

  22 October 2025

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  Saudi Railway Company (SAR) has signed an agreement with local investment firm Riyad Capital to establish a real estate fund to develop a mixed-use, transit-oriented project in Mecca.

  The project will span more than 90,000 square metres in the Al-Rusifah district, near the Haramain high-speed railway station in Mecca.

  The development is estimated to cost more than SR6bn ($1.6bn).

  Riyad Capital operates through four business lines: asset and wealth management, brokerage, corporate investment banking and securities services.

  In an official statement, the company said its real-estate portfolio spans three continents and is valued at more than $6bn.

  UK-based analytics firm GlobalData expects Saudi Arabia's construction industry to grow by 4% in real terms in 2025, supported by investments in the housing, energy and transport infrastructure sectors.

  The commercial sector is estimated to grow by 3.7% in real terms in 2025 and to register an average annual growth of 3.7% from 2026 to 2029, supported by the government’s Vision 2030 plan. Under that plan, the government aims to attract 150 million tourists annually and add 320,000 hotel rooms by 2030.

  

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  Yasir Iqbal
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  Petrojet consortium wins $1.1bn oil contract in Algeria

  22 October 2025

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  A consortium of Egypt’s Petrojet and Italy’s Arkad has been awarded a $1.087bn contract for the second phase of the Hassi Bir Rekaiz oil field development project in Algeria.

  The consortium is led by Petrojet and the client is Groupement HBR, a joint venture of Algeria’s national oil and gas company Sonatrach and Thailand’s PTTEP.

  The scope of work includes the construction of a central processing facility with a capacity of 31,500 barrels a day (b/d), along with associated facilities and pipeline networks extending over 217 kilometres.

  It also includes the construction of a power distribution station and storage tanks.

  In a statement, Petrojet said: “This award represents a significant step forward in strengthening Petrojet’s presence in the Algerian market and reaffirms its position as a leading regional [engineering, procurement and construction] EPC contractor delivering integrated, world-class energy projects.”

  Groupement HBR, which operates the Hassi Bir Rekaiz oil and gas concession, tendered the design contract for the second phase of the field development project in August 2023.

  HBR started production from phase one of the project in June 2022.

  China Petroleum Engineering & Construction Corporation executed EPC work on the first phase of the field development project. The contract was signed in 2020, with a value of $116m.

  The production target for phase one was 13,000 b/d of oil.

  The project site, in the eastern part of Algeria, contains blocks 443a, 424a, 414ext and 415ext.

  PTTEP and its partners found oil and gas in 10 out of 11 exploration wells drilled in the 1,916-square-kilometre area between 2013 and 2016.

  Algeria oil and gas sector

  Project activity in Algeria’s energy, industrial and manufacturing sectors is steadily building as the country focuses on a vertically integrated strategy that leverages the exploitation of its natural resources.

  In July, Sonatrach and Italian energy company Eni signed a production-sharing hydrocarbons contract estimated to be worth $1.35bn.

  The contract covers the exploration and exploitation of the Zemoul El-Kebir concession area, located in the Berkine Basin, approximately 300km east of Hassi Messaoud.

  The deal with Eni is the latest of several high-profile agreements that Sonatrach has announced with international oil and gas companies.

  In June, Algeria awarded five out of the six oil and gas exploration licences it offered during its 2024 bidding round, a move viewed as a success by stakeholders in the country’s energy sector.

  The companies that were awarded blocks included France’s TotalEnergies, state-owned QatarEnergy, Eni and PTTEP.

  

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  Wil Crisp