Topic: Real estate in Saudi Arabia
As Islamic law is the leading fundament of Saudi Arabian legislation, it is also applied to the finance sector, inheritance, and property law. For the real estate industry, Shariah guidelines are followed in the financing of asset portfolios, loans, and mortgages.
At the same time, Saudi Arabia introduced a white tax of 2.5 percent in 2016, which according to Shariah law is applied to undeveloped land plots in urban areas. This is to encourage landowners to develop the land and subsequently generate more income for the Saudi Arabian government.
Residential real estate
As the country with the largest population within the Gulf Cooperation Council region, Saudi Arabia has the highest demand for new housing units with almost four million projected for 2022. According to the latest data available, the majority of residents in Saudi Arabia dwell in apartments, followed by villas. Only around 665 thousand people in Saudi Arabia live in traditional Arabic houses, which contain a traditional inner courtyard surrounded by rooms with small windows to protect them from the desert heat.
Commercial real estate
The capital city of Riyadh has the leading stock of available office real estate at over 4.23 million square meters. This was followed by Jeddah at 1.29 million and the Dammam Metropolitan Area at 1.25 million square meters.
It is a similar situation in terms of available retail real estate, where Riyadh led with three million square meters, followed by two million in Jeddah and 1.16 million square meters in the Dammam Metropolitan Area.
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