Saudi Arabia's New Premium Residency Visas Report by Knight Frank

A recent report by Knight Frank, a leading global property consultancy, reveals that Saudi Arabia's newly introduced Premium Residency visas, including the much-awaited property-ownership linked visa, are poised to attract significant real estate investment from high-net-worth individuals (HNWI) worldwide, particularly those interested in the Holy Cities of Makkah and Madinah.

The Saudi government unveiled five new options for distinguished residency visas in January, including the long-awaited property-linked visa, which will help create additional demand from international buyers.

Knight Frank surveyed 506 Muslim global HNWI from nine countries to gauge their attitudes, aspirations, and appetite for real estate investment in Makkah and Madinah. The findings were eye-opening: These HNWI collectively own more than 2,250 homes around the world, with 29% already owning between three and five properties. Makkah emerged as the top desired city for real estate purchases (30%), followed by Riyadh (25%) and Madinah (19%). A staggering 84% of global HNWI interested in purchasing in Saudi Arabia would like to do so in one of the Holy Cities, underscoring the depth of pent-up demand for home ownership from outside the country.

Aligning with Residential Market Dynamics

According to Harmen de Jong, Regional Partner and Head of Consulting for MENA at Knight Frank, the new Premium Visa for property owners is a welcome move by the Saudi authorities. He believes it will bolster demand at a time when affordability and shifting residential market dynamics, largely driven by a greater desire among young intra-Saudi migrants to rent rather than own, have been slowing the level of deal activity.

Knight Frank's data reveals that nationwide residential sales volumes in Saudi Arabia were down 16% last year, while the total value of all real estate transactions across all asset classes declined by 9%. The introduction of the Premium Residency visas is expected to reinvigorate the market and boost transaction volumes.

Catering to Global HNWI Preferences

The report highlights that Muslim global HNWI budgets average $4.7 million for homes in the Holy Cities, with 40% of those considering Makkah prepared to spend upward of $5 million.

Investors for the Holy Cities also have high capital value growth expectations, with 37% expecting annual price growth of 6-10% in Madinah, while nearly a third (31%) are expecting the same rate of increases in Makkah.

Mohamad Itani, Partner and Head of Residential Project Sales and Marketing for Saudi Arabia at Knight Frank acknowledges the challenge for developers in balancing the expectations of wealthy global buyers with those of domestic buyers.

For instance, 77% of those wanting to buy a property in Makkah are interested in apartments, while the desire for apartment living in Madinah is even higher at 84%. This contrasts sharply with Saudi nationals, less than half of whom are interested in owning an apartment.

Additionally, just 30% of global HNWI are interested in the off-plan sales market in the Kingdom, with 63% favoring completed properties.

Here are some of the previous articles we’ve written about regional investments with NEOM and Sindalah.