Saudi Arabia offers new real estate visa, attracting $2bn investment
Analysis conducted by global real estate experts Knight Frank suggests that Saudi Arabia's introduction of premium real estate visas is poised to attract high-net-worth investors to the country, particularly Muslim investors interested in properties in the Holy Cities of Makkah and Madinah.
According to Knight Frank's Destination Saudi Arabia report, Muslim high-net-worth individuals (HNWI) are anticipated to allocate approximately $1.96 billion towards real estate investments in these sacred locations.
Knight Frank's research, which involved surveying 506 Muslim HNWI from nine countries, sheds light on the preferences and inclinations of potential investors in Makkah and Madinah. The findings reveal a significant interest in property ownership, with many respondents already possessing multiple properties, totaling over 2,250 homes collectively. Makkah emerged as the top choice for real estate purchases among Muslim HNWIs, followed by Riyadh and Madinah.
This surge in interest coincides with the Saudi government's recent announcement of premium residency options, including visas tied to property ownership. Faisal Durrani, Partner and Head of Research for the MENA region at Knight Frank, emphasized the symbolic and practical significance of Saudi Arabia for many individuals, particularly those with aspirations related to Hajj pilgrimage or residence in the country.
The introduction of the Premium Visa scheme is seen as a positive development by industry experts like Harmen de Jong, who anticipate it will stimulate demand amidst a slowing residential market. Residential sales volumes experienced a notable decline in the previous year, highlighting the potential impact of such initiatives on revitalizing the real estate sector.
Knight Frank's research also underscores the substantial budgets allocated by Muslim global HNWI for properties in the Holy Cities, with an average of $4.7 million per investor. A significant portion of potential buyers are willing to spend upwards of $5 million, indicating a strong appetite for premium real estate offerings. This trend is expected to fuel interest among developers, particularly for projects catering to higher-end segments of the market.
Furthermore, the demand for real estate in Saudi Arabia is driven not only by financial considerations but also by cultural and religious motives. Many investors perceive Saudi Arabia as a promising investment opportunity, while others are drawn by the spiritual significance of owning property in proximity to sacred sites.
Saudi Arabia's initiative to attract high-net-worth investors through premium real estate visas has the potential to invigorate the property market, with significant interest observed among Muslim global HNWI. This presents opportunities for developers and stakeholders to capitalize on the demand for luxury properties while also contributing to the country's economic growth and development aspirations.
