A significant portion of these investments is being directed toward Saudi Arabia’s giga-projects, including NEOM, a futuristic city being developed along the Red Sea coast as part of the Kingdom’s Vision 2030 initiative. NEOM is designed to house approximately nine million residents, making it one of the most ambitious urban developments in the world.
Knight Frank’s research, which surveyed 1,037 households, including 100 expatriates residing in Saudi Arabia, highlights a strong interest in investing within Saudi Arabia’s major real estate projects. The report estimates that both Saudi nationals and expatriates will invest approximately $489 million in traditional residential properties across the country, while an additional $733 million will be directed toward large-scale giga-projects such as NEOM.
Declining Interest in NEOM?
Despite NEOM being a key driver of Saudi Arabia’s economic diversification strategy, its appeal among investors appears to be waning. According to Knight Frank, the percentage of investors interested in NEOM has dropped from 84% in 2023 to just 17% in 2025.
Industry experts believe that this decline can be attributed to several factors:
Emergence of new large-scale developments: Other giga-projects such as The Red Sea Project, Qiddiya, and Diriyah Gate are now gaining more attention from investors.
Affordability concerns: NEOM’s futuristic vision comes with premium price tags, leading investors to explore more affordable alternatives.
Limited ready-to-move-in options: Many investors prefer immediate returns on investment, and the timeline for completing NEOM’s residential units remains a key concern.
Growing Confidence in Saudi Arabia’s Housing Market
Despite shifting investor sentiment toward NEOM, the overall outlook for Saudi Arabia’s real estate market remains highly positive. The report suggests that there is a potential pool of 2.75 billion Saudi riyals ($733 million) in private capital from both Saudi nationals and expatriates that is ready to be deployed into the country’s real estate sector.
This highlights a growing appetite among private investors to participate in the Kingdom’s rapid urban expansion, which aligns with Saudi Arabia’s broader economic transformation goals under Vision 2030. With real estate playing a crucial role in job creation, economic diversification, and housing accessibility, these investments are expected to fuel further growth in the property market.
Foreign Investment and Expanding Expatriate Demand
Another key factor in the rising real estate investments is Saudi Arabia’s recent regulatory changes that aim to attract foreign investors. Eased residency rules, investment incentives, and the expansion of expat-friendly residential communities are all contributing to a rise in international interest in Saudi properties.
In Riyadh, Jeddah, and Dammam, the demand for luxury apartments, gated communities, and high-end villas is surging, particularly among expatriates who see Saudi Arabia as an emerging global business hub. This trend is likely to further increase the demand for high-quality residential developments, strengthening the overall real estate market.
As Saudi Arabia accelerates its urban transformation, the real estate sector will continue to play a pivotal role in shaping the country’s economic future. While giga-projects like NEOM, The Red Sea Project, and Diriyah Gate are expected to remain at the center of this transformation, investor attention is gradually diversifying toward other promising developments.
With $1.22 billion in private capital flowing into residential real estate this year, Saudi Arabia’s property market is set for a strong and dynamic 2025, offering exciting opportunities for both local and international investors.
