Value of Saudi real estate deals fall 11% in 2023

Pexels/Gustavo Fring

• Transaction value down to SAR193 bn
• April down 47 percent on 2022
• Construction minerals sector grows

The value of Saudi real estate transactions fell 11 percent during 2023 to about SAR193.45 billion ($51.59 billion), but the number of construction material licenses awarded in the kingdom rose 39 percent in the same period.

Figures released by the Ministry of Justice this week showed transactions fell from SAR216.7 billion to SAR193.45 billion. The figures are still far lower than the high of SAR439.8 billion in 2014, when oil prices hit $115 per barrel. 

April was the lowest month, when transactions were down 47 percent on the previous year at SAR8.6 billion. Residential accounted for 58.6 percent of sales, followed by commercial at 38 percent, with Riyadh accounting for 44 percent of sales and Jeddah 18 percent. 

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Construction sector growth

At the same time, the Ministry of Industry and Mineral Resources issued 183 licences in the construction materials sector during 2023, up 39 percent from the 132 issued in 2022, the National Industrial Development Center said. 

Investment in the sector rose 1 percent to SAR336 billion in 2023, and the number of factories in the sector rose to 2,065, from 1,955 in 2022, while the number of Saudis working in the sector rose 17 percent to 40,850. 

Saudi Arabia is engaged in a massive economic development programme centred on giga-projects valued so far at $1.25 trillion, leading one real estate consultancy to describe the country as the world’s biggest ever construction site. 

The World Bank said last week that it expects Saudi GDP to grow by 4.1 percent in 2024 and 4.2 percent in 2025, rebounding from a 0.5 percent contraction in 2023 caused by Opec+ output cuts.