Makkah Sellable Market Outlook to 2027

Due to structural shift in Saudi Arabia’s residential market as the demand for apartments overtaking villas is increasing, as Makkah is a desirable place to love due to rich culture

Due to structural shift in Saudi Arabia’s residential market as the demand for apartments overtaking villas is increasing, as Makkah is a desirable place to love due to rich culture. The market for the developers offering sellable apartments is fragmented with a presence of several local and international players. The increasing focus of government to increase home ownership as per Saudi Vision 2030 is encouraging more players to enter this space.

Makkah Sellable Market

Renowned players like Al Akaria and Jeddah Economic Company dominate prime locations with luxurious projects. abal Al Sharq Contracting Company caters to mid-range segments, while Bin Ladin Real Estate Group offers well-built options across districts. International Expansion: Alargan International Real Estate Company and Abdul Latif Jameel Land bring innovative concepts and premium communities. Proximity to the Holy Haram remains a premium, with developers vying for limited central zone land.

The Makkah Sellable market is basically driven by established giants like like Dyar Al Haram, MASAR Project, Thakher Makkah Project and Dar Al Mashaer Towers Project to regional and international players like Alargan and Abdul Latif Jameel, developers drive supply and shape market trends. Regulatory bodies like SAMA and SCTH set the framework, while Vision 2030 initiatives foster infrastructure development and tourism growth.

Makkah Sellable Market Analysis

While demand remains high, apartment supply within the central holy zone is limited due to land constraints and development restrictions. This scarcity drives up prices and creates a competitive market.

Land scarcity within the central holy zone restricts new development, impacting supply and affordability which can come in challenges of the market

The Saudi Vision 2030 plan aims to diversify the economy and attract foreign investment. This includes ambitious tourism and infrastructure projects in Makkah, further boosting the residential market.

Makkah apartments command some of the highest rental rates in the Kingdom, particularly during peak pilgrimage seasons. This offers attractive returns for investors.

New projects are been put up in the market Umm Al-Qura Development and Construction Company and Al-Zamel Real Estate Development Company have signed an agreement. Al-Zamel will acquire a luxury residential tower near Masar Front for SR 500 million.

Makkah Sellable Market Research

The market for the developers offering sellable apartments is fragmented with a presence of several local and international players.

The increasing focus of government to increase home ownership as per Saudi Vision 2030 is encouraging more players to enter this space.

Major projects like Dyar Al Haram, MASAR Project, Thakher Makkah Project and Dar Al Mashaer Towers Project are influencing the market at a great level.

Dyar Al Haram project which is located King Fahadv Road with total area 1.2 million SQM with source of revenue from sales of residential, commercial and investment Rent.

Recent Developments

Um Al-Qura Development and Construction Company has laid the foundation stone for the primary hotel projects in the Masar project. By construction of seven hotel towers and an investment value exceeding SAR 7 billion ($1.86 billion).

Kempinski and Taj have signed agreements to operate two five-star hotel towers. Embassy Suite - By Hilton will operate a four-star hotel tower.

Saudi Arabia has identified housing as one of its key projects under Vision 2030. For instance, in February 2023, Saudi REDF invested SAR 924 million in Sakani Program for housing projects to increase the proportion of Saudi households that own a house to 70% by 2030.

Jabal Omar project, which is a multi-use real estate mega development project in Makkah covers approximately 230,000 square meters of land. The project comprises 40 towers, including luxury hotels and serviced apartments, inspired by traditional Arab architecture.

In February 2023, Saudi REDF invested SAR 924 million in Sakani Program for housing projects to increase the proportion of Saudi households that own a house to 70% by 2030.

Future Outlook

The market will grow at a CAGR of 5.4% during 2023-2027 due to Development Towards Vision 2030 and Increasing Number of Hajj and Umrah Pilgrims.

Market competitiveness may lead to innovations in property offerings, amenities, and pricing strategies. Developers may strive to differentiate their projects to attract buyers in a competitive market.

Ongoing and planned infrastructure projects, including transportation improvements and urban development initiatives, can enhance the overall appeal of different neighbourhoods within Makkah.

High rental rates during peak pilgrimage seasons and growing demand for serviced apartments offer lucrative opportunities for investors.

Limited land availability, especially in prime locations, coupled with increasing demand, could lead to continued capital appreciation of well-located properties.