Saudi Arabia’s property market is expected to remain resilient in the long term despite geopolitical headwinds, with USD bns in global capital poised to enter once conditions stabilize, Knight Frank said in an emailed statement to Enterprise. While short-term activity may slow, the Kingdom’s market continues to benefit from strong structural demand, regulatory reform, and growing international investor interest.

Waiting out the war: The report identifies USD 6.3 bn in private global capital targeting the Kingdom’s real estate market once regional tensions ease, even as near-term investment activity softens. “We do not expect long-term demand from non-resident investors to weaken but instead expect a temporary hiatus while the conflict resolves itself,” Knight Frank’s head of MENA Research Faisal Durrani said.

Saudi’s appeal comes down to the fundamentals: The demand remains underpinned by “population growth, capital inflows, business expansion and inward migration.” Only a prolonged escalation in the war that disrupts travel, capital flows, and business relocation decisions poses a key downside risk.

Pre-conflict pockets of interest

Foreign ownership reforms have already generated “substantive” interest: USD 1.5 bn in targeted residential assets before the conflict. Across all respondents surveyed, 63% expressed interest in buying property in Saudi Arabia, with 25% planning to do so this year. Enthusiasm is higher among buyers from North Africa (Egypt and Algeria), with 90% keen to invest.

IN CONTEXT- The year 2026 was meant to showcase the fruits of last year’s reforms aimed at cooling prices, boosting supply, and attracting foreign capital. These include opening the market to foreign buyers across 170 designated areas, implementing a rent freeze in Riyadh, and reforming the White Land Tax. How the war will ultimately shape the impact of these measures on the sector remains unclear.

Where are they looking? Riyadh leads global investor interest (55%), followed by Jeddah (46%), Madinah (43%), Makkah (41%), and Dammam (22%). Demand for the Holy Cities is particularly strong among Muslim investors.

What’s pulling and pushing foreign wallets: International buyers are mainly motivated by financial returns (51%), Vision 2030 growth prospects (18%), and religious or cultural connections (17%), according to Knight Frank’s Destination Saudi 2026 report (pdf). Barriers include lifestyle differences (22%) and a preference to invest only in their home country (26%). Regional expats face practical constraints, including visa and residency limits. Some 10% cited Premium Residency permits as a motivating factor.

Beyond the residential space

The retail and F&B sector is emerging as the second most popular investment sector, attracting 37% of investors amid strong consumer spending. Growth is being driven by a shift toward experience-led, mixed-use destinations, supported by a young population and evolving consumer preferences.

Branded homes are also gaining traction, with 77% of high-net-worth individuals showing interest and USD 3.4 bn of capital circling the segment. The sector is still nascent — 1.7k units currently, 1.9k in development — but the market is expanding rapidly, particularly in Diriyah Gate and Jeddah. Demand for these properties is expected to “extend beyond domestic buyers to include a broader international pool,” the consultancy’s KSA General Manager Susan Amawi said.

Looking ahead

Affordability needs to be addressed: Some 63% of international buyers budget under USD 1 mn, with 69% expecting a large villa or townhouse at that price — an expectation that doesn’t always align with prime-area pricing. Developers will need to bridge this gap with recalibrated pricing strategies and product offerings if they want to tap international demand.

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