NEOM: Top Picks for Expats Buying Houses in Saudi Arabia

_{Photo: Reuters}

In a recent survey conducted by global property consultancy Knight Frank, NEOM has emerged as the most preferred Giga project among expatriates residing in Saudi Arabia, with a significant 29% expressing a strong desire to invest in homes within this futuristic city. Jeddah Central and King Salman Park closely follow as the second and third choices, with respective preference rates of 15% and 8%.

This survey, which is part of Knight Frank's inaugural Destination Saudi report, was meticulously designed to capture the real estate investment interests of expatriates within the Kingdom. In total, 241 expatriates participated, providing valuable insights into their preferences and behaviors regarding property investment in Saudi Arabia.

The findings of the survey shed light on the demographics of expatriates residing in the Kingdom. Notably, a substantial portion (56%) of the respondents have been living in Saudi Arabia for over a decade, indicating a long-term commitment to the country. Furthermore, a significant majority (76%) of the participants are employed in the private sector, reflecting the diverse nature of the expatriate workforce in Saudi Arabia.

Interest in specific areas within NEOM varies among expatriates, with The Line attracting the highest interest at 42%, followed by Sindalah Island at 19%. However, despite the allure of these innovative projects, budget constraints may pose challenges for both expatriates and developers. The survey reveals that 87% of expatriate respondents have a budget of less than SR3.5 million, while the anticipated pricing for Giga project properties is expected to exceed $1 million.

Nevertheless, there remains a considerable level of interest among expatriates, with 41% of respondents with budgets under $1 million expressing continued interest in investing in Giga projects. This suggests a willingness among expatriates to adjust their financial plans to accommodate their desire for upscale living within these ambitious developments.

Interestingly, the survey indicates a high probability of expatriates proceeding with residential purchases in preferred Giga projects, with a staggering 72% indicating their likelihood to do so. The average budget for expatriates purchasing homes in Giga projects stands at a noteworthy SR2.7 million, significantly higher than budgets allocated for properties elsewhere in the Kingdom.

Knight Frank's analysis further highlights the substantial spending power within Riyadh's expatriate community, estimated at an impressive SR3.2 billion ($863 million). This underscores the potential capital ready to be invested in Giga projects, thereby fueling their growth and development.

When considering the premiums expatriates are willing to pay for living in a Giga project over a non-Giga project, the survey reveals an average premium of 5.7%. Notably, 32% of respondents are willing to pay a premium ranging from 2.5% to 5%, indicating their willingness to invest in the unique lifestyle offered by these projects. Additionally, high-earning expatriates, particularly those with monthly incomes exceeding SR40,000, have shown readiness to pay premiums of 5-7.5%.

Overall, the survey provides valuable insights into the preferences and investment behaviors of expatriates in Saudi Arabia, highlighting the significant potential for growth and development within the Kingdom's real estate sector, particularly within innovative projects like NEOM.

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