Saudi Real Estate & Construction Market Outlook for 2025: Smart Growth, Giga Ambitions, and $191B in Sight

As Saudi Arabia accelerates toward its Vision 2030 goals, the Kingdom’s real estate and construction sectors are undergoing a profound transformation. With the total construction output value projected to reach $191 billion by 2029, a 29.05% increase from 2024 – the momentum is unmistakable. The Saudi Smart Construction Market is setting a new standard for urban development, blending tech, ambition, and policy.

$191B Construction Output by 2029: A 29% Leap from 2024

Saudi Arabia’s construction output is forecast to grow from $148 billion in 2024 to $191 billion by 2029, reflecting a compound annual growth rate (CAGR) of 4.6%. This expansion is fueled by a confluence of factors: a booming residential sector, rising demand for office space, and the rollout of giga-projects like New Murabba and NEOM. Riyadh alone has captured $135.2 billion in awarded contracts since 2020, accounting for 63% of national activity.

Residential Construction to Hit $25.21B by 2030

Residential development sits at the center of Saudi Arabia’s smart construction ambitions. According to Mordor Intelligence, the residential construction market is expected to grow from $19.59 billion in 2025 to $25.21 billion by 2030, at a CAGR of 5.17%. Apartments and condominiums dominate with a 70.5% market share in 2024, but villas and landed houses are gaining traction, growing at a 6.44% CAGR, driven by lifestyle shifts and foreign ownership liberalization.

Smart Construction Methods Gain Ground: 7.33% CAGR

While conventional on-site methods still account for over 90% of residential builds, modern methods of construction (MMC) including modular and prefabricated systems, are growing at a 7.33% CAGR. Government mandates for Building Information Modeling (BIM) and modular integration in public bids are catalyzing this shift. The Saudi Smart Construction Market is increasingly defined by digital tools, off-site fabrication, and sustainability benchmarks like the Mostadam green rating.

Riyadh’s $195B Urban Vision: 340K Homes, 4.6M sqm Office Space

Riyadh is the epicenter of the Kingdom’s construction boom. The capital’s $195 billion development blueprint includes 340,000 residential units, 4.6 million square meters of office space, and 2.6 million square meters of retail. The New Murabba project alone will deliver 104,000 homes across 18 new neighborhoods. With a projected population of 10 million by 2030, Riyadh’s smart mobility investments like the 176-km driverless Metro and $5B in road upgrades are redefining urban livability.

1M Homes, $1.3T in Projects: Vision 2030 Drives Demand

Saudi Arabia’s Vision 2030 is not just a policy—it’s a $1.3 trillion commitment to real estate and infrastructure. The government aims to deliver over 1 million homes, 362,000 hotel keys, and more than 15 million square meters of new retail and office space by 2030. These targets are transforming the Saudi Smart Construction Market into one of the most ambitious globally. In 2024 alone, 3,800 new construction licenses were issued, bringing the total to 8,900.

Public-Private Synergy: 7.10% CAGR in Public Investment

Private capital still dominates residential construction, holding a 74.56% share in 2024. However, public investment is growing at a 7.10% CAGR, with sovereign entities like the Public Investment Fund (PIF) anchoring mega-developments. Hybrid financing models such as build-to-rent REITs backed by pensions are unlocking long-term rental supply while de-risking infrastructure delivery. This synergy is a defining feature of the Saudi Smart Construction Market’s resilience and scalability.

Western Region Commands 53% of $1.3T Real Estate Value

While Riyadh leads in contract volume, the Western Region accounts for 53% of the total real estate development value under Vision 2030. Projects like the $685.5 billion giga-plan will deliver 382,000 homes and 330,000 hotel rooms, reinforcing the region’s role as a tourism and cultural hub. Coastal engineering innovations and heritage-integrated designs are setting new standards for sustainable, culturally resonant development.

Final Word: Smart Construction as the Kingdom’s Growth Engine

The Saudi Smart Construction Market is undoubtedly the engine driving the Kingdom’s rapid urban and economic transformation. With giga-projects, digital mandates, and a $191 billion construction output on the horizon, 2025 marks a pivotal year. As public and private players align under Vision 2030, Saudi Arabia is orchestrating a future where cities speak the language of progress.

Also Read: Saudi Smart Construction Drives 6.2% Sector Growth