Saudi Arabia’s Vision 2030, a national roadmap for economic diversification, remains the backbone of the country’s construction and real estate sectors. Under Vision 2030, ongoing giga-projects involve the building of entire new cities, large-scale residential housing developments, luxury resorts and restored heritage sites, ensuring a substantial pipeline of construction activity and real estate development over the medium and the longer term. Within this framework, Saudi Arabia’s hosting of major sporting and global events such as the 2034 FIFA World Cup and Expo 2030, coupled with the rising numbers of tourists visiting the Kingdom, is providing further impetus to develop infrastructure, hospitality and entertainment centres.
Indeed, the construction sector is undergoing a shift, moving from a giga-project expansion era that dominated the market from 2020-24 to a new phase focused on prioritising and executing high-profile international events. New giga-project awards saw a marked slowdown in activity with moderate short-term supply growth. After growing significantly from 2020-23 to over $30bn, giga-project awards declined to $25bn in 2024 and fell sharply in 2025 with $5bn awarded in the first five months of the year. This was due in part to rising project costs, a fall in oil prices, weaker GDP growth, and uncertainty caused by US tariff policy. Still, the Kingdom’s construction output value is expected to reach $191bn in 2029, a rise of 29.1% compared to 2024, according to global consulting firm Knight Frank.
Alongside this, the real estate sector is continuing to grow, bolstered by regulatory reforms driving Saudi and foreign home ownership. Saudi Arabia’s Real Estate General Authority (REGA) expects the property market to reach $101.6bn by 2029, with a projected compound annual growth rate (CAGR) of 8% from 2024.
Structure & Oversight
The key government entities regulating the construction sector include the Ministry of Municipalities and Housing (MoMH), responsible for urban planning and housing development, as well as issuing licences, construction permits and zoning approvals. The Saudi Contractors Authority is a nonprofit private sector-led entity under MoMH supervision that regulates and develops the contracting sector. The National Committee for Saudi Building Code, which became the Saudi Building Code Centre in March 2025, is an independent government agency that develops building code regulations, while the Ministry of Investment promotes foreign direct investment. The Tourism Development Fund is playing an increasingly significant role in supporting private investors in developing hotels across the Kingdom. The National Infrastructure Fund (Infra) serves as a development-financing partner for infrastructure projects and fosters private investment.
Overseeing the real estate sector, REGA regulates non-governmental real estate activities and grants licenses and permits to individuals and organisations. The National Housing Company (NHC), which became a government-owned real estate development and investment company in 2020 under MoMH, works with private developers and the government to promote housing availability and affordability. Title registration is overseen by the National Real Estate Registration Services Company, which was launched in 2022 to provide a digital database of property across the country and to promote transparency within the sector.
Construction Performance
Saudi Arabia’s construction market is a leader in MENA. With an estimated market size of $78.6bn in 2025, the sector is projected to reach $98bn by 2030, at a CAGR of 4.5% from 2025 to 2030, according to India-based market research firm Mordor Intelligence. Construction is one of the central pillars of the Vision 2030 economic diversification strategy, and real estate and construction are two of the fastest-growing non-oil sectors in Saudi Arabia, contributing 24% to non-oil GDP in the third quarter of 2024, according to official government figures. Knight Frank estimates construction contracts worth $215.4bn were awarded across Saudi Arabia between 2020 and 2025, highlighting the government’s ambition and financial commitment to achieve Vision 2030. Riyadh is the centre of construction activity, including the development of retail and office space, as well as hotels and residential units, with $135.2bn of contracts awarded between 2020 and 2025, accounting for 63% of the total nationwide.
Growth Drivers
Fuelling growth in the construction sector is rising housing demand amid population growth, international event hosting and government-backed giga-projects aligned with Vision 2030, even as those developments have experienced a recent cooling. The construction sector is largely backed by Saudi Arabia’s nearly $1trn sovereign wealth fund, the Public Investment Fund (PIF), which plays a critical role as a financier of large-scale infrastructure works.
Sports and event infrastructure is becoming an increasingly important engine of demand. The Kingdom is preparing to host major global sporting events, including the 2034 FIFA World Cup, the 2027 AFC Asian Cup and the Saudi Arabian Grand Prix Formula 1 racing event, as well as Expo 2030, taking place in Riyadh and which is expected to attract more than 40m visitors, according to the PIF. The 2034 FIFA World Cup is set to further accelerate infrastructure development. In preparation for the event, 15 stadia, 134 training facilities and 230,000 hotel units are being built or planned, and Knight Frank estimates that project values total $17.5bn. In addition, construction is under way at Trojena, a mountain tourism and winter sports destination in north-western Saudi Arabia where $3.3bn worth of construction projects are under way. This includes the construction of the world’s largest human-made lake stretching 2.8 km. The resort aims to provide hotel and leisure facilities for more than 700,000 visitors annually.
In line with global trends, the growing use of technology and artificial intelligence-powered tools, from building information modelling to automation, is further accelerating growth. Such technology can help speed up project delivery, and reduce costs and environmental impact. A notable example is the construction of the world’s tallest 3D-printed building, a 9.9 metre three-storey villa, built by Saudi real estate developer Dar Al Arkan in 2023. The MoMH plans to build 20% of new homes using 3D printing by 2030.
Giga-Projects
Under Vision 2030, Saudi Arabia is advancing with the construction of flagship giga-projects concentrated in Riyadh, the western regions and along the Red Sea coast. The value of projects moving into the execution phase across the Kingdom surged to $196bn in 2025, up 20% from 2024. This underscores the pace at which previously approved projects are progressing from planning into delivery, according to Knight Frank’s project tracker, and reflects a shift from awarding new contracts to prioritising execution.
Western Saudi Arabia has emerged as a hotspot for giga-projects, driving regional construction activity. This includes NEOM, a sprawling futuristic urban and industrial development project nearly the size of Belgium being built along the Red Sea coast. Other notable giga-projects include Red Sea Global, a luxury tourism project, and Qiddiya, an entertainment and leisure city. As of late 2025, 17 giga-projects were under way with $431.3bn in investments unveiled since 2016 and $57bn awarded in contracts along the Kingdom’s western coastline. By 2030, these projects could deliver over 382,500 new homes, over 3m sq metres of office space, more than 4.3m sq metres of retail space and over 330,000 hotel rooms, subject to construction timelines and market conditions.
Giga-projects are also catering to rising demand driven by tourism as Saudi Arabia aims to position itself as a global tourist destination. In 2023, over 100m tourists visited the Kingdom, and the government has set a new goal of 150m annual visitors by 2030. This trend provides a strong pipeline of construction activity for developers of tourism infrastructure, hospitality, entertainment and event facilities. In 2025, Saudi Arabia launched 29 entertainment investment opportunities worth SR120bn ($32bn). In Riyadh, about 2500 new hotel rooms are expected to be completed by the end of 2026 to meet the growing demand, around half of which will be luxury accommodation.
Elsewhere, the Red Sea Global project is a notable luxury tourism destination. The AMAALA project, an upscale wellness resort owned by the PIF, is planned to feature nearly 4000 hotel rooms across 30 hotels, luxury villas, apartments and estate homes. The project reached a milestone in 2024 with its first international flights arriving at the Red Sea International Airport and the opening of several high-end resorts, including Shebara, St. Regis and Ritz-Carlton Nujuma. In July 2025 Red Sea Global announced it was on track to open AMAALA and an additional 11 resorts by early 2026.
Snapshots
The centrepiece of Vision 2030 is NEOM, a $500bn high-tech urban and industrial development spanning 26,500 sq km along the Red Sea coast. First announced in 2017, the project has faced implementation challenges as its scale and timelines have evolved. In 2022 Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud said NEOM’s first phase would cost $319.4bn, divided equally between the PIF and the private sector. In November 2024 Finance Minister Mohammed Al Jadaan described NEOM as a multi-decade project expected to take more than 50 years to complete. As of early 2025, construction contracts worth $28.7bn had been awarded for NEOM and its sub-projects. On completion, the Line was originally envisioned as two parallel linear structures extending approximately 170 km. However, recent reporting suggests ambitions have been recalibrated, with only around 2.4 km expected to be completed by 2030.
Diriyah, located at a UNESCO World Heritage site outside of Riyadh, is another flagship $62.2bn giga-project. The Diriyah Company, owned by the PIF, has emerged as one of the Kingdom’s most advanced developments. As of mid-2025, the value of commissioned projects totalled $14.5bn, with a further $45.6bn in the pipeline. In September 2024, Diriyah announced deals worth nearly $1bn with European hotel and real estate developers and luxury retailers investing in the project. Another notable giga-project is a $9.8bn entertainment and tourist resort being built in Qiddiya, about an hour’s drive from Riyadh, on a 334-sq-km site, making it two and a half times the size of Disney World. Launched in 2018, construction continues steadily. The water park Aquarabia is 95% complete, and the amusement park, developed by US company Six Flags, opened to the public on December 31, 2025. Also under the banner of Vision 2030 is the $25bn King Salman Park, billed as the world’s largest urban park. Under construction, the park will become the new centre of activity and a smart city in Riyadh, with over 150 attractions, including a 20,000-seat arena. The project aims to deliver 27,000 resident units; office space for 30,000 office workers; 2500 hotel rooms; along with hospitality, retail and conference facilities. 13,000 construction workers were on site and the project is expected to receive 50m annual visitors with building work expected to span a decade.
Prioritisation
Despite ongoing giga-projects, several projects have been scaled back and timelines extended in the past year due to rising costs and lower oil prices in early and mid-2025. In the first half of the year, a total of $25.7bn giga-projects was awarded, a decline of $44.2bn when compared with the first half of 2024, according to MEED market intelligence. As Saudi Arabia prioritises the completion of infrastructure essential for hosting global events, including the FIFA 2034 World Cup and Expo 2030, construction work on several giga-projects, including NEOM, has slowed. Price volatility in construction materials, exacerbated by global supply chain disruptions and geopolitical tensions in the region, has also delayed completion of awarded projects. In August 2025 the PIF announced an $8bn write-down on some of its giga-projects, including NEOM. The PIF valued giga-projects on its books at $56.2bn as of end 2024, over 12% lower when compared to 2023, according to the PIF’s 2024 annual report.
Yet, despite the decrease in contract values, the Kingdom’s overall project landscape remains positive and continues to be shaped by Vision 2030. Giga-projects such as NEOM and Qiddiya are still attracting substantial investment. Beyond traditional private sector investment for giga-projects, Knight Frank noted in a 2025 report that there is room for structured collaborations with global sovereign funds and institutional investors seeking entry into the market.
Materials
The construction sector is facing rising cost pressures driven primarily by labour, energy and logistics. In November 2025 the Kingdom’s construction cost index recorded an overall increase of 1% in construction costs compared to November 2024, reflecting a rise across both residential and non-residential segments. According to data from the General Authority for Statistics (GaStat), this increase marks a continuation of inflationary pressures on construction inputs, largely driven by higher labour costs, energy prices and equipment rental fees.
Overall energy costs rose 9.9% year-on-year (y-o-y), while labour costs increased by 1.5% in the residential sector and 1.1% in non-residential projects, according to GaStat. The residential construction sector, which accounts for approximately 77.5% of the total construction market in the country, recorded a 1% annual increase in costs, while the non-residential sector, representing 22.5% of the market, also saw a 1% y-o-y rise compared with November 2024. Looking ahead, construction costs in Saudi Arabia are projected to increase by 5-7% in 2025, outpacing many global markets, according to consultancy firm Currie & Brown. This outlook reflects ongoing geopolitical and economic volatility, which is expected to further push up prices, alongside persistent shortages of skilled labour. Supply chains and the cost of key construction materials, including steel and aluminium, are also expected to remain exposed to US tariff policy.
By contrast, cement prices in Saudi Arabia remain among the lowest in the region, supported by fuel subsidies and domestic overcapacity. The Kingdom is the world’s 10th-largest cement producer, with annual production capacity exceeding 80m tonnes across 20 factories nationwide. As of August 2025, retail prices for cement ranged between $67 and $75 per tonne.
Real Estate Legislation
Saudi Arabia’s real estate sector sits at the centre of Vision 2030, playing a critical role in the Kingdom’s transition towards diversified, non-oil growth. The sector is set to experience substantial expansion through 2025, driven by rising tourism numbers, the hosting of major global events, sustained government backing for giga-projects, and policy initiatives aimed at increasing homeownership and improving access to mortgage finance. A series of legislative reforms is underpinning this growth by boosting liquidity, improving market transparency and attracting more foreign capital. “Saudi Arabia’s regulatory infrastructure has become one of the most advanced in the region,” Adnan Alshobely, CEO of Amlak International for Real Estate Finance Co, told OBG. “Initiatives such as open banking and the Fintech Sandbox enable the sector to innovate responsibly, while strong standardisation from the regulators ensures sustainable and healthy growth,” he said.
In January 2024 the Kingdom introduced a new Premium Residency Visa, allowing foreign investors to own property in Saudi Arabia for the first time. This marked a pivotal shift in the real estate landscape, opening the market to international buyers and long-term investors. Further liberalisation followed in early 2025, when new regulations allowed foreign investors to gain exposure to real estate in the Holy Cities of Makkah and Al Madinah through Saudi-listed companies, increasing liquidity while maintaining existing ownership controls. In July 2025, the government passed the Non-Saudi Real Estate Ownership Law, permitting foreign individuals and entities to buy and own property for personal use in designated zones, including Riyadh and Jeddah, reversing long-standing foreign ownership restrictions. The law, which came into effect in January 2026, aligns with Vision 2030’s objective of attracting international capital by implementing guidance, representing a significant step in opening the market to non-Saudi investors.
Alongside ownership reforms, fiscal measures have been introduced to support more efficient land use and provide greater regulatory clarity. In August 2025, the government updated the White Land Tax Law to curb land hoarding and encourage urban development by increasing tax rates on undeveloped plots. In April 2025, Saudi Arabia implemented a 5% real estate transaction tax (RETT) on property transfers under a new RETT Law and its implementing regulations. The tax applies to residential, commercial and industrial transactions, part of efforts to clarify the legal and tax framework for property deals across the Kingdom. The 5% RETT regime continues the exemption of real estate sales from the 15% value-added tax that previously applied to such transactions, and aims to support market transparency and regulatory certainty to encourage investment.
Performance
These legislative reforms are supporting rising demand for the construction of hotels, luxury resorts, affordable and upscale housing, entertainment venues and retail space. The real estate sector doubled its contribution to the economy from 5.9% in 2023 to 12% in 2024 as interest from private investors increased. According to a March 2025 report by Knight Frank, Saudi Arabia’s residential real estate market is expected to attract $1.2bn in private property sales in 2025 with NEOM being one of the most sought-after locations for prospective homebuyers. The report found that Saudi nationals and Saudi-based expatriates plan to spend $489m on residential real estate, based on a survey of 1037 households, including 100 Saudi-based expatriates, alongside a further $733m earmarked for residential purchases within giga-projects.
In 2025, Saudi Arabia’s residential real estate market reached a value of $154.6bn and is projected to expand at a CAGR of 6.7% to $213.9bn by 2030, according to Mordor Intelligence. Execution capacity is improving, with contract awards for real estate projects rising 8% y-o-y in the first quarter of 2024 and total construction spending reaching $49.3bn, underscoring a robust project pipeline. The unveiling of several largescale, mixed-use urban developments in the second quarter of 2025 signals continued confidence and optimism in the Kingdom’s real estate market. Among the major announcements were OSUS EYE, a $533m urban development project in northern Riyadh by OSUS Real Estate Development Company; and Pulse Wadi, a $3.2bn technology and cybersecurity district in Riyadh, dubbed “Saudi Silicon Valley”.
Riyadh remains one of the Kingdom’s most dynamic real estate markets, across both the residential and office sectors, driving construction activity and sustaining occupancy rates and rental growth in the capital. Introduced in 2021, the Regional Headquarters Programme requires multinational firms to relocate their regional headquarters to Riyadh and continues to be a driver of office demand in the country.
As of early 2025, more than 500 multinational corporations had established their regional headquarters in Riyadh, reinforcing its position as a global business centre. By mid-2025, the office market remained tight, characterised by high occupancy levels and rising rents. Residential prices and rents in Riyadh have risen sharply amid strong underlying demand. In the second quarter of 2025, rental rates for villas increased by 13.9% y-oy, while apartment rents rose by 6.9%. According to Knight Frank, from 2019 to 2025, apartment and villa prices increased by 75% and 40%, respectively, indicating structural rental supply-and-demand imbalances. In response to rising housing costs over the medium term, the government ordered a five-year freeze on residential and commercial rental prices in Riyadh in September 2025. In the retail segment, lifestyle retail space in Riyadh and Jeddah is projected to expand by nearly 600,000 sq metres, reaching 1.3m sq metres by 2027. Over the longer term, a shift towards integrated retail, dining and entertainment destinations is expected to shape market development.
Top Players
According to the Forbes Most Impactful Real Estate Leaders 2025 top-100 list, published in February 2025, three Saudi Arabia-based companies ranked among the top 20, based on criteria including total assets, revenue and project value. The highest-ranked Saudi company was ROSHN, placed 12th. In 2025, it secured a $533.3m sharia-compliant credit facility from Saudi National Bank to finance the development of ROSHN Front, marking the group’s expansion into the commercial and retail segments. Ranked 15th was the NHC, a government-owned investment vehicle, which recorded sales of more than $6.7bn in 2024 and held a portfolio of 39 projects valued at over $24.5bn across 17 cities. Real estate developer Dar Al Arkan was in 16th place, with total assets of $9.3bn and revenue of $732.1m in the first nine months of 2024. In February 2025, the company acquired the 1m-sq-metre Orchid Land site in Jeddah for $1.1bn with a group of investors.
Housing
Saudi Arabia’s real estate sector is increasingly shaped by a strategic focus on affordable housing, aimed at meeting demand driven by population growth and urbanisation. Under Vision 2030, the Kingdom set a target of raising home ownership among Saudi nationals to 70% by 2030. Government data show that the share of Saudi families owning homes increased from around 47% in 2016 to 65.4% by the end of 2024, surpassing the Vision 2030 Housing Programme’s interim 2025 target. According to Knight Frank estimates, more than 115,000 new homes will be required annually nationwide to meet demand from Saudi nationals. Riyadh is expected to require approximately 305,000 additional homes over the next decade, a trend that will underpin sustained expansion in the residential real estate market over the long term. To support this growth, government-backed housing initiatives are focused on expanding supply and improving access to mortgage financing for Saudi nationals, primarily through the Real Estate Development Fund (REDF). In 2024, the REDF reported a 16.4% increase in mortgage financing for beneficiaries of housing support programmes, reaching $16.7bn, up from $14.4bn in 2023. These measures continue to drive steady demand across the housing market as new supply comes online.
In May 2023 the MoMH announced the launch of a five-year, $43bn programme to deliver 240,000 housing units, positioning it among the largest housing initiatives globally. ROSHN, a real estate developer backed by the PIF, is a central player in advancing the Kingdom’s home-ownership objectives. Launched in 2020, ROSHN aims to deliver 155,000 homes nationwide through large-scale residential communities integrating commercial and community facilities, supported by a development budget of $47bn as of early 2025. Another key participant in the housing segment is the NHC, which is driving large-scale residential and mixed-use developments across the Kingdom, supported by a pipeline that exceeds $50bn.
Public-private partnerships are further accelerating delivery, as reflected in a 2024 agreement between the NHC and China State Construction Engineering Corporation to construct 20,000 housing units across multiple regions in the Kingdom. “Saudi Arabia’s real estate market is maturing rapidly as the focus shifts from expansion to efficiency and liveability,” Eyad Al Bunyan, CEO of Alargan, told OBG. “The next phase of growth will be defined by how effectively developers align with the lifestyle and affordability expectations of a young, urban population.”
Outlook
With $1.3trn in announced real estate and infrastructure projects since 2016, Saudi Arabia is reinforcing its position as one of the world’s most dynamic construction and real estate markets, offering substantial opportunities for both local and international developers. At the same time, government spending on sports infrastructure and flagship giga-projects is expected to sustain momentum in the sector. Rising tourism and the hosting of major global events will continue to fuel demand across the hospitality, retail and luxury resort segments, as Saudi Arabia positions itself as a global tourism destination. At the same time, the government’s housing targets and mortgage support policies are set to underpin sustained residential development over the long term, while recent legislative reforms are encouraging greater foreign ownership and investment across the broader real estate sector.
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