Real Estate Investments in Saudi Arabia
Purchasing and managing a real estate portfolio remains one of the most reliable ways to preserve and increase capital. When creating a successful real estate portfolio, an important role is played by the correct choice of an expert company that will help develop an effective investment model.
Expert company in the international real estate and investment market Velesclub Int. Since 2015, it has successfully occupied a leading position in the field of investment in international real estate. Our services already cover more than 22 countries around the world, we are growing and developing every day.
Economy of Saudi Arabia, statistics and expert assessment.
The largest economy in the Middle East and 18th in the world. Currently, Saudi Arabia is one of the largest reformers in the world, implementing large-scale economic and social changes. The goal of the strategy: by 2030, move from a closed economy under state control to a free market with an emphasis on private entrepreneurship and minimize the economy’s dependence on the oil and gas sector and production volumes.
Previously, Saudi Arabia was often called a conservative and even closed country when it came to attracting foreign business and foreign investment. “Strategy 2030” has changed both Saudi Arabia’s position on this issue and the opinion of the world community as a whole. The country has chosen a course for a large-scale transformation of industry, has focused on the issue of stimulating innovation and is actively working on strengthening its position on the world stage.
Let's look at the statistics:
According to the Saudi Arabian Ministry of Finance, the country's GDP growth rate for 2023 should decrease by 0.03%, which is due to the Saudi Arabian government's decision to voluntarily reduce oil production by 1 million barrels per day as part of the OPEC+ agreement in June. Initially, the measure was intended for July with the possibility of extension. This reduction was then extended several times and will remain in effect until the end of the year. The country's budget deficit could amount to 2% of GDP, or 82 billion rials (previously, the Ministry assumed a surplus of 0.4%).
“Over the past 7 years, Saudi Arabia has carried out more than 700 different economic reforms in nine main areas: the business environment, the efficiency of public services, the organization of labor in the country, the transparency of technological innovations and their accountability, investment and finance, health and education. , which certainly leads to sustainable and dynamic development of the Kingdom’s economy. By 2030, Saudi Arabia has every chance to enter the TOP 10 most competitive economies in the world. Investors should take a very careful look at this jurisdiction and not miss the opportunity to increase their investment portfolio.” - summarizes the Head of Analytics and Investment Block of VelesClub Int. Ksenia Shamitko.
Real estate in Saudi Arabia, investment opportunities and facts
As part of Vision 2030, the development of the real estate sector was identified by Saudi Arabia as one of the key ones. The country's Ministry of Housing has set a plan to build 300,000 housing units over 5 years together with the private sector.
Since the country has stabilized from the effects of COVID-19, the receipt of mortgage loans is growing at a high rate every year. The largest is for residential villas (as much as 80%) of the total volume of mortgage loans. Construction activity in the housing market is stable, especially in the large cities of Riyadh and Jeddah, where a large number of diverse development projects are being implemented from year to year.
Saudi Arabia pays great attention to business relocation and creates favorable conditions for foreign companies. The Kingdom took the initiative to encourage foreign companies and exempted them from income tax, and also obliged all foreign companies with contracts with the government to move their head offices to Saudi Arabia. These measures have led to stimulation of the construction industry and the need for a large number of office and commercial premises. According to statistics, every year about 100 multinational companies (technology, consulting and construction, drinks and food) receive licenses to move their regional headquarters and to establish main regional offices (for example PepsiCo, Deloitte, PwC and Bechtel) in Riyadh , thereby gaining direct access to participate in the transformation of the region's largest economy. The Saudi Arabian market is characterized by fairly high competition and growing demand for primary real estate due to increased commercial activity and increased competition. The market is expected to witness aggressive competition between local and international developers. Saudi Arabian companies will be forced to radically change their strategies and adopt international standards and practices.
How is the purchase of real estate in Saudi Arabia regulated for foreigners?
To purchase real estate in Saudi Arabia, foreign investors and buyers should seek help from companies that are experts in the international real estate and investment market, such as VelesClub Int., to avoid mistakes. The Saudi government has created a legal framework to regulate the purchase of real estate by foreigners and requires strict compliance with it.
Let's talk about a number of possibilities:
“To avoid mistakes, enlist the support of experts and Saudi Arabia will undoubtedly become the ideal place for you to build investment potential and diversify your real estate portfolio.” – summarizes the General Managing Partner of VelesClub Int. Sergey Tumanov.
Any investment in real estate requires evaluation and balance, and complete trust in market experts. A team of experienced managers at VelesClub Int. I am always ready to answer all your questions and accompany you at all stages of the transaction and subsequent reinvestment and diversification of your investment portfolio.