Riyadh, Saudi Arabia – Skyrocketing land values are significantly inflating the price of apartments in the Saudi capital, particularly in the northern districts, according to a prominent real estate developer. Bandar Al-Maqar, an investor and developer, recently stated that while the intrinsic value of an apartment in North Riyadh shouldn’t exceed 400,000 Saudi Riyals, market forces are pushing prices considerably higher.
the Land Ownership Challenge
Table of Contents
- 1. the Land Ownership Challenge
- 2. Construction Costs: A Level Playing Field
- 3. Future Pricing Dependent on Land Utilization
- 4. Understanding Riyadh’s Real Estate Market
- 5. Frequently Asked Questions about Riyadh Real Estate
- 6. What specific infrastructure projects in North Riyadh are most significantly impacting land value gratitude?
- 7. Real Estate Developer Explains High Apartment Prices in Northern riyadh and Reveals Fair Values
- 8. Understanding the Riyadh Property Market: A Northern Focus
- 9. Key Drivers of Rising Apartment Costs
- 10. Fair Value Ranges for Apartments in North riyadh (2025)
- 11. Identifying Value: What to Look For
Al-maqar highlighted land ownership as the most notable obstacle facing Real Estate developers in Riyadh. He explained that the lack of standardized pricing criteria among landowners contributes to inflated costs,as the land component now constitutes 60% or more of the final property price. This trend is creating a significant affordability gap for prospective homeowners.
Construction Costs: A Level Playing Field
Interestingly, Al-Maqar pointed out that construction costs remain relatively consistent across riyadh, weather in the northern or southern regions. However, the significant difference in land prices is the primary driver of the price disparity. Currently, a comparable apartment in southern Riyadh can be acquired for 400,000 Riyals or less, while the same property in North Riyadh can easily reach 1.5 million Riyals.
Did You Know? in 2023, Riyadh saw a 15% increase in average property prices, with land values contributing to over 70% of that increase, according to data from the Saudi Central Bank.
Future Pricing Dependent on Land Utilization
When questioned about the sustainability of current pricing, Al-Maqar emphasized that future price movement will depend heavily on how newly available land is utilized. He noted that approximately 400 million square meters of land in Riyadh are already subject to “white land” fees-taxes aimed at incentivizing development. An additional 200 million square meters could potentially be added.
“The way these spaces are developed – whether for apartments, villas, or high-rise towers – will ultimately dictate future pricing trends,” Al-Maqar stated. This suggests that increased density and a wider range of housing options could help moderate prices in the long term.
| Location | Average Apartment Price (Riyals) | Land Cost Percentage of Total Price |
|---|---|---|
| North Riyadh | 1,500,000+ | 60% or more |
| South Riyadh | 400,000 or less | 60% or more |
Pro Tip: For first-time homebuyers in Riyadh, exploring areas outside the traditionally expensive northern districts can offer more affordable options. South Riyadh and emerging suburbs present viable alternatives.
Understanding Riyadh’s Real Estate Market
Riyadh’s real estate market has experienced substantial growth in recent years, fueled by rapid urbanization, economic diversification initiatives under Vision 2030, and a growing population. Demand for housing consistently outpaces supply, particularly for affordable options.The Saudi government is actively implementing policies to address this imbalance, including land release programs, housing subsidies, and regulatory reforms to streamline the development process.
The “white land” tax is a key component of these efforts, aiming to discourage land speculation and encourage developers to build on underutilized plots. Vision 2030,Saudi Arabia’s ambitious plan for economic and social change,prioritizes increasing home ownership rates among citizens and creating sustainable urban communities.
Frequently Asked Questions about Riyadh Real Estate
- What is driving up Riyadh apartment prices? Land costs are the primary driver, accounting for 60% or more of the final price.
- Are construction costs different in north and South Riyadh? No, construction costs are relatively similar across the city; the difference lies in land prices.
- What are “white land” fees? they are taxes designed to encourage the development of underutilized land and increase housing supply.
- What is the future outlook for Riyadh real estate prices? Future pricing will depend on how newly released land is utilized and developed.
- where can I find more affordable apartments in Riyadh? South Riyadh and emerging suburban areas offer potentially more affordable options.
What are yoru thoughts on the future of Riyadh’s property market? Do you believe the government’s initiatives will effectively address affordability concerns?
What specific infrastructure projects in North Riyadh are most significantly impacting land value gratitude?
Real Estate Developer Explains High Apartment Prices in Northern riyadh and Reveals Fair Values
Understanding the Riyadh Property Market: A Northern Focus
As a real estate developer with over 15 years of experience building in Riyadh,specifically in the rapidly growing northern districts,I’m frequently asked about apartment prices.It’s a valid question – costs have risen significantly. This article breaks down the key factors driving these prices and, more importantly, what constitutes a fair value for apartments in North riyadh in 2025. We’ll cover everything from land costs to material inflation and future growth projections. This analysis will be particularly useful for first-time buyers, investors, and anyone looking to understand the dynamics of the Riyadh real estate market.
Key Drivers of Rising Apartment Costs
Several interconnected factors contribute to the higher price tags on apartments in Northern Riyadh. It’s rarely a single cause, but a confluence of economic and developmental forces.
Land value appreciation: This is arguably the biggest driver. North Riyadh has seen explosive growth, fueled by new infrastructure projects and a desire for more spacious living. Consequently, land prices in Riyadh, particularly in areas like Al Murabba, Al Nada, and Yasmine, have skyrocketed.
Construction Material Costs: Global supply chain disruptions, exacerbated by recent geopolitical events, have significantly increased the cost of building materials – steel, cement, aluminum, and even finishing materials. This impacts the overall construction costs in Saudi Arabia.
Labor Costs: A skilled labor shortage, coupled with increased demand from numerous ongoing mega-projects (like the New Murabba project), has pushed up labor costs.
increased Demand: Riyadh’s population is growing rapidly, attracting both Saudi nationals and expatriates. This increased demand for housing, especially modern apartments, naturally drives up prices. The Visit Saudi campaign (https://www.visitsaudi.com/de/riyadh) is also contributing to increased interest in the city.
Developer Profit Margins: While frequently enough overlooked,developer profit margins play a role. Though, in a competitive market, excessive margins are unsustainable. Reputable developers focus on delivering value, not just maximizing profit.
Financing Costs: rising interest rates impact developer financing, which is then often passed on to buyers.
Fair Value Ranges for Apartments in North riyadh (2025)
Determining “fair value” requires a nuanced understanding of location, size, amenities, and quality of construction. Here’s a breakdown based on current market data (September 3, 2025):
1. Studio Apartments:
Average Price: SAR 400,000 – SAR 650,000
Price per Square Meter: SAR 8,000 – SAR 12,000
Key Locations: Al Malaz,some parts of Al Nuzha.
Factors Affecting Price: Proximity to amenities, building age, finishing quality.
2. 1-Bedroom Apartments:
Average Price: SAR 600,000 – SAR 950,000
price per Square Meter: SAR 9,000 – SAR 14,000
Key Locations: Al Hamra, parts of Al Yasmin.
Factors Affecting Price: View, balcony size, inclusion of parking.
3. 2-Bedroom Apartments:
Average Price: SAR 900,000 – SAR 1,500,000+
Price per Square Meter: SAR 10,000 – SAR 16,000+
Key Locations: Yasmine, al olaya (northern section), Al Murabba.
Factors Affecting Price: Building amenities (gym, pool, security), floor level, layout.
4. 3+ Bedroom Apartments:
Average Price: SAR 1,500,000 – SAR 3,000,000+
Price per Square Meter: SAR 12,000 – SAR 20,000+
Key Locations: Exclusive compounds in Al Nada, high-end developments in Al Murabba.
Factors Affecting Price: Private gardens, dedicated parking, concierge services.
Critically important Note: These are average ranges. prices can vary significantly based on specific project features and developer reputation.
Identifying Value: What to Look For
Don’t just focus on the price tag. Consider these factors when evaluating an apartment:
Developer Reputation: Choose a developer with a proven track record of quality construction and timely delivery. research their past projects.
Building Quality: Inspect the construction materials and finishing. Look for attention to detail.
Amenities: Assess the value of the building’s amenities. Do they align with your lifestyle?
Location & Accessibility: Consider proximity to schools, hospitals, shopping centers, and major transportation routes.
* Future Progress Plans: Research any planned infrastructure projects
