Executive Summary: Saudi Arabia's Luxury Residential Supercycle
Saudi Arabia's luxury residential market is experiencing unprecedented growth. Average villa prices rose +12.4% year-on-year to SAR 5,396/sqm, while apartments surged +10.5% to SAR 6,100/sqm — representing 75% cumulative appreciation since 2019. Knight Frank reports SAR 3.57 billion ($953 million) in private capital targeting branded residences, with 67%+ of Saudi nationals expressing intent to purchase a branded unit. The Kingdom currently has 1,775 branded residence units with 2,500 additional in the pipeline by 2028. Branded residences command SAR 65,000+/sqm versus SAR 5,500/sqm for non-branded equivalents — a 12x premium reflecting the depth of luxury demand. The mortgage market has expanded to SAR 932.8 billion (+550% since 2016). Track intelligence via Vision 2030 AI.
Price Dynamics: District-Level Analysis
Riyadh's luxury residential market shows extreme variation by district. Al Taawun leads price growth at +32% YoY to SAR 9,470/sqm. Northern Riyadh corridors — including Al Malqa, Al Narjis, and KAFD-adjacent neighborhoods — command SAR 7,000-12,000/sqm for premium apartments. CBRE reports that luxury villa compounds in Diplomatic Quarter and Al Olaya achieve SAR 15,000-25,000/sqm. The New Murabba district, designed as a 15-minute walkable city for 400,000 residents, is expected to command premium pricing given its Public Investment Fund backing, mixed-use masterplan, and proximity to KAFD. Knight Frank projects New Murabba residential pricing at SAR 8,000-15,000/sqm for standard units and significantly higher for Mukaab-integrated sky residences.
Branded Residences: The $1 Billion Market
Saudi Arabia's branded residence sector has exploded. Major launches include Mouawad Residences (SAR 880 million project value), Trump Tower Jeddah, and Etoile by Elie Saab. International brands — Four Seasons, Marriott International (Ritz-Carlton Residences, W Residences), Armani, Bvlgari, and Raffles — are all either operational or under development. The SAR 65,000+/sqm premium for branded versus non-branded (SAR 5,500/sqm) reflects both lifestyle positioning and investment security: branded residences demonstrate 25-35% higher capital appreciation and lower vacancy rates than comparable non-branded luxury stock per JLL. With 2,500 additional units by 2028, the branded segment will grow by 140% within three years.
Mortgage Market: SAR 932.8 Billion & Institutional Innovation
Saudi Central Bank (SAMA) data shows the Saudi mortgage market expanded to SAR 932.8 billion — a 550% increase since 2016. The Saudi Real Estate Refinance Company issued Saudi Arabia's first residential mortgage-backed securities (RMBS) in August 2025, with a subsequent $2 billion sukuk offering oversubscribed 6x. These capital market innovations signal the maturation of Saudi housing finance and create new institutional entry points for fixed-income investors. Mortgage rates currently range from 5.5-7.5% depending on loan-to-value and borrower profile. The government targets homeownership growth from 63.7% to 70% by 2030, requiring sustained mortgage lending growth of 8-12% annually.
Rental Yields & Investment Returns
Average Riyadh rental yields stand at 8.89% — significantly above Dubai (5-7%), London (3-4%), and New York (4-5%). The yield premium reflects both strong rental demand (driven by expatriate populations and young Saudi household formation) and relatively lower capital values versus global luxury benchmarks. For The Mukaab and New Murabba residences specifically, Knight Frank projects initial yields of 6-8% for standard units and 4-6% for ultra-luxury sky penthouses — with capital appreciation expected to compensate for lower income yields on premium stock.
Foreign Ownership: January 2026 Landmark Reform
The Non-Saudi Real Estate Ownership Law (Royal Decree M/14), effective January 22, 2026, permits foreign nationals to own residential property across Saudi Arabia for the first time (Makkah and Madinah excluded). Previously, non-Saudis could only lease. This reform, combined with the Capital Market Authority (CMA)'s QFI abolition (February 1, 2026), opens Saudi luxury residential to international high-net-worth individuals, family offices, and institutional buyers. Real Estate General Authority (REGA) administers the new ownership registration framework. Early indications suggest strong interest from GCC nationals, European family offices, and Asian institutional buyers per Financial Times.
New Murabba Residential: 90,000 Units at Scale
The New Murabba Development Company district will deliver 90,000 residential units across a mix of luxury apartments, sky residences within The Mukaab, branded residences, family villas, and affordable housing. The 19-square-kilometer masterplan integrates 80+ mosques, 20+ schools, 10+ healthcare facilities, and 2.3 million sqm of green space. Parsons Corporation was awarded the integrated delivery contract on January 13, 2026. While The Mukaab superstructure (including internal sky residences) was paused per Reuters, the surrounding district — including ground-level and mid-rise residential — continues active development. Phased delivery targets: Expo 2030, FIFA 2034, and full completion by 2040.
Housing Demand: 305,000 Units Needed
Riyadh's population is projected to grow from 7.95 million (2025) to 9.6 million (2030) per the Royal Commission for Riyadh City. This requires approximately 305,000 new housing units over five years — a rate of 60,000+ units annually. Current annual delivery runs at approximately 40,000 units, creating a persistent supply deficit that underpins price appreciation. ROSHN — PIF's housing development arm — has a 200 million sqm land bank with 85,000 units in its pipeline, including the flagship Sedra community (20 million sqm, 30,000 homes). Sedra Phase 5 launched September 2025 with prices from SAR 1.6 million.
Investment Risk Factors
Risks include: potential supply overshoot if multiple giga-projects deliver simultaneously post-2030, interest rate sensitivity (mortgage rates linked to SAIBOR), construction delay risk (Mukaab pause as precedent), and liquidity risk for ultra-luxury assets. Mitigants: SAR-USD peg eliminates currency risk, no capital gains tax on residential property for individuals, structural demand from population growth, and PIF institutional backing. IMF Saudi Country Report forecasts moderate fiscal deficits but continued government commitment to housing investment.
Conclusion: The Luxury Residential Investment Case
Saudi Arabia's luxury residential market offers a compelling combination: 75% appreciation in five years, 8.89% rental yields, SAR 932 billion mortgage infrastructure, and transformative foreign ownership reforms effective January 2026. The Mukaab/New Murabba district represents a generational opportunity in branded and ultra-luxury residential. Track through Vision 2030 AI, Real Estate General Authority (REGA), and Knight Frank.