Saudi Arabia faces a major housing shortage with research showing over 115,000 new homes needed annually until 2030 to meet demand. This is driven by the government's 70% homeownership target and high youth population seeking their own homes. Knight Frank estimates 825,000 units will be required 2024-2030. To address this, Saudi Arabia launched a comprehensive housing program in 2018, including the Sakani initiative which has facilitated over 800,000 contracts. Mortgage finance has also surged five-fold. Supply-side measures include streamlining approvals and the National Housing Company's community plans for 300,000 units by 2025. In total, over 1.04 million new homes are planned or under construction by 2030.
Research has shown that Saudi Arabia will require more than 115,000 new homes each year until 2030 to meet the demand from Saudi nationals. This insight was revealed in a new whitepaper by global property consultancy Knight Frank, titled *Transforming Saudi's Residential Housing Market: Opportunities Abound*. The paper noted that approximately one-third of this demand is driven by the government's target of achieving a 70 per cent homeownership rate, a significant increase from the 63.7 per cent homeownership rate recorded at the end of 2023.
The primary driver of housing demand, however, is household formation, with around two-thirds of the demand attributed to young Saudis, both single and married, choosing to move into their own homes. The paper explained that this trend is a natural consequence of the growing population.
Dr Christopher Payne, Partner and Chief Economist for MENA at Knight Frank, stated that housing demand is closely linked to Saudi Arabia's youthful population. He mentioned that approximately 45 per cent of Saudi nationals are under the age of 20, and 63 per cent are under 30. He predicted that in the coming years, many of these young Saudis would aspire to own and live in their own homes.
Knight Frank's conservative estimate for housing demand between 2024 and 2030 stands at 825,000 units. As of late 2023, the Ministry of Municipal and Rural Affairs (MOMAH) reported 883,562 applicants for their Sakani programme, which aims to provide Saudi nationals with access to homeownership and the financial means to afford their own homes.
Launched in 2018, the kingdom's housing programme was designed to reform the governance, delivery, and financial aspects of the residential housing market. One of the key initiatives under the programme is the Sakani programme, which has seen over 800,000 contracts signed since its inception. Of these, 415,000 were for ready-made homes, 201,000 for self-construction projects, 90,000 for off-plan products, and 94,000 for MOMAH land products.
A key indicator of the housing programme's success has been the substantial growth of mortgage finance, which surged from 121.9 billion Saudi riyals at the end of 2016 to 662.4 billion riyals by the end of Q2 2024 - an increase of over five times in less than eight years. On the demand side, MOMAH has leveraged online service platforms to simplify and accelerate housing applications for Saudi nationals. Simultaneously, on the supply side, the Etmam programme has streamlined the approval process for development, offering a central online service centre to obtain the necessary permits.
Regarding supply, the National Housing Company (NHC) has announced developments in its new community masterplans, which will include around 200,000 housing units. By the end of 2025, this number is expected to rise to 300,000 units. Knight Frank is currently monitoring 1.04 million new homes that are either under construction or planned, with delivery expected by 2030.
The government has implemented programs like Etmam to streamline the approvals and permitting process for housing developments. The National Housing Company has also announced plans for community masterplans that will incorporate around 300,000 new housing units by the end of 2025. Knight Frank is currently tracking over 1.04 million new homes that are either under construction or planned for delivery by 2030, indicating that substantial progress is being made to address Saudi Arabia's acute housing shortage.
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