Dramatic shifts in demographics and lifestyles in Saudi Arabia are yet to be reflected in its housing market, with most new homes still being large villas on the periphery of "ever-expanding urban boundaries" of the kingdom's major cities, according to a new report.
The kingdom's population has grown rapidly and become much younger, but builders still focus on large family homes, Knight Frank found in its inaugural Saudi Arabia National Housing Survey.
“This type of product is one which the new demographic cohort will struggle to afford or have any desire to occupy,” the survey found.
More individuals are looking to buy property and demand is highest for more affordable units, with 65 per cent of respondents stating they were looking to buy a property below 1 million Saudi riyals (Dh979,300), the survey showed.
Nearly 56 per cent of 1,000 survey respondents that are currently renting said they were looking to buy a property within the next five years.
“Saudi Arabia has seen rapid changes … its population has increased by over 520 per cent in the 50 years to 2020 and over the same period its rate of urbanisation has increased from 49 per cent to 84 per cent,” Taimur Khan, associate partner and head of research at Knight Frank Middle East, said.
More than half (51 per cent) of the kingdom's population currently live in apartments but 61 per cent said they are looking to purchase a villa when they next move, the survey found.
Respondents suggested that the most important attribute they desired in a new home would be a garden, closely followed by a modern design and more than one living room.
More than six in 10 potential buyers said they would be willing to buy an off-plan property.
“To date the challenge has been understanding exactly where the parameters of demand lie,” Stefan Burch, general manager of Knight Frank Saudi Arabia, said.
“Having commissioned this extensive survey, we have been able to observe the type and price of residential stock that will respond to the majority of existing demand which will, in turn, assist stakeholders when considering participation in the residential sector,” he added.
