Real Estate

Super-rich Muslims seek homes in Saudi holy cities

March 14, 2024, 4:10 AM

Construction cranes tower over the Grand Mosque in Mecca, as a pilgrim kneels in prayer

506 HNWIs surveyed
82% want property in kingdom
Mecca is ‘primary target’

Wealthy Muslims are keen to take advantage of golden residency visas in Saudi Arabia to buy nearly $2 billion of property in Mecca, Medina and Riyadh, according to new research.

Just over 500 high-net-worth individuals from nine countries with a sizeable Muslim population – Algeria, India, Indonesia, Iraq, Iran, Malaysia, Pakistan, Singapore and Turkey – were surveyed by YouGov and property consultancy Knight Frank.

Eighty-two percent of the respondents said they wanted to buy real estate in the kingdom.

Knight Frank’s report said that “30 percent of our respondents cite Mecca as their primary target”. Riyadh was next at 25 percent and then Medina at 19 percent.

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Most of the 506 high-net-worth individuals – defined in the survey as people “with a personal net worth of over $500,000 excluding the value of their main home” – said they were considering buying in the holy cities within the next five years.

About 22 percent said they were interested in buying in the next 12 months.

When the survey findings were broken down further, “those considering the kingdom as a permanent home base” were most interested in Mecca (33 percent), followed by Riyadh (27 percent).

“Investors have a slightly different view,” the report said, “with respondents choosing Mecca and Riyadh equally as their top two investment target locations (28 percent each).”

The wealthy Muslims surveyed allocated an average budget of $4.7 million for a property in either of the two holy cities. The total potential investment from all 506 respondents was close to $2 billion.

Construction has boomed in Mecca over the past decade. Some of the residential projects have been controversial, however, particularly the luxury high rises overlooking the Grand Mosque built by developer Jabal Omar.

Jabal Omar's luxury buildings in Mecca have been met with controversy — Jabal Omar’s luxury buildings in Mecca have been met with controversy

In January the government announced a premium visa for owners of property worth at least SAR4 million ($1.07 million) as part of its drive to increase foreign investment and tourism in the country. Ownership by non-Saudis in the two holy cities is limited to 99-year leaseholds.

Qatar is the only other Gulf country to offer a permanent residency visa, which is for buyers of property worth at least $1 million.

Real estate and tourism are key planks of the reform programme Saudi Arabia launched in 2016, modernising a once closed society by allowing women to drive and to work, opening cinemas and ending rules against gender mixing in public spaces.

The kingdom's conservative culture is still a drawback for some. Among the wealthy Muslims who said they were not interested in buying Saudi property, 55 percent cited a “lack of resonance with lifestyle and culture in the country”.

But Faisal Durrani, head of Middle East research at Knight Frank, said the level of interest seen “underscores the depth of pent-up demand for home ownership from outside the country”.