The real estate market in Saudi Arabia is a good investment choice for those who want to benefit from the growing middle class and the fast-shifting demographics of the country. With one of the highest youth populations in the world, Saudi Arabia is rapidly urbanizing. This young population is seeking a better quality of life, while women are increasingly entering the workforce. As a result, the spending power of Saudi households is expected to increase, giving the real estate market a healthy boost. Read below some genuine reasons for real estate investment in Saudi Arabia.
High quality of life:
As an investor in the real estate market in Saudi Arabia, you should keep the country’s economy in mind. While the Saudi economy relies heavily on oil, the country is trying to diversify its revenue streams by embracing real estate development. The recent implementation of the new real estate law should kickstart this process and help Saudi Arabia become a more dynamic investment destination. In addition, many projects are being implemented by the Ministry of Housing to improve the real estate market in the country.
Long-term investment potential:
The long-term investment potential of the Saudi Arabian real estate market is quite promising. This country boasts a large population that is mostly young and demanding for specific industries. Its government has also emphasized the need for residential developments to help increase the economy and make the nation more attractive to foreign investors. With this demographic trend in mind, it’s no wonder that the government has been promoting residential development as a key focus area.
Excess liquidity from oil revenues:
In Saudi Arabia, there is a lot of potential to profit from the abundance of sovereign wealth funds, which governments create with large budgets and low international debt. However, these funds are not immediately converted to money or consumed. For these countries, sovereign wealth funds are created to address the exhaustibility and volatility of resource revenues. When you invest in real estate in Saudi Arabia, you can take advantage of this liquidity and benefit from future appreciation.
A growing population and a rapidly urbanizing nation are reasons to invest in Saudi Arabia’s real estate market. Recent changes to the tax system will make it easier for investors to take advantage of a growing economy. A new 5% VAT on real estate transactions will increase the availability of affordable housing and revitalize the economy. The new tax structure is expected to increase homeownership to 70 percent by 2030.