Giga-projects

Neom and Jeddah offer appeal to expat buyers

April 2, 2024, 10:17 AM

Of potential buyers interested in living in the giga-project Neom, 42 percent said they would favour The Line

Survey reveals buyers’ choices
Minimum $1m cost is barrier
Gulf between budgets and prices

Many expatriates in Saudi Arabia are interested in buying property in Neom and Jeddah Central and willing to spend over $1 million, a real estate survey showed this week.

“When asked about which giga-project they would most like to buy a home to live in, Neom emerges as the clear favourite, followed by Jeddah Central and King Salman Park,” consultants Knight Frank said in their Destination Saudi report.

It noted that 14 percent of the sample said they were uninterested in purchasing property in any of the giga-projects, which are at the centre of Saudi Arabia’s massive economic transformation plans.

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That figure rose to 38 percent when respondents were informed that starting prices for giga-project units would be $1 million.

“There appears to be a gulf between expats’ budgets and developers’ planned sales prices,” said the report, based on the survey carried out with YouGov.

King Salman Park is a large green area and urban district in Riyadh that has received less media attention than projects aimed at tourists and foreigners, such as futuristic city Neom.

The latter includes 11 avant-garde resorts, a traditional tourist island called Sindalah and an innovative horizontal city called The Line.

Of those interested in Neom, 42 percent would buy in The Line and 19 percent on Sindalah island, where hotels are due to open this year.

The survey said ultra-rich Muslims outside Saudi Arabia were most interested in buying property in the Red Sea Global tourist project, Neom and Jeddah Central.

The real estate projects have been valued at $1.25 trillion, turning Saudi Arabia into what Knight Frank called the biggest construction site in the world.

But doubts have set in about when some will be finished after the government said in December there could be delays.

Opec+ oil output cuts have failed to push oil prices to breakeven levels for Saudi Arabia, which now forecasts three years of budget deficits.

Although reducing unemployment among Saudi men and women is one of the prime goals of the strategy, Saudi Arabia is still relying on a large population of expatriates.

The last census in 2022 found Saudis formed 58 percent of a total 32 million population.

The government is trying to drive foreign direct investment up to $100 billion a year by 2030, but attracted only $33 billion in 2022 and $12.3 billion in 2023.