RIYADH: The private sector is playing a pivotal role in Saudi Arabia’s urban development, with 65 local developers collectively investing over SR200 billion ($53.32 billion) in the housing sector, according to Saudi Minister of Municipalities and Housing Majid Al-Hogail.

The housing sector in the Kingdom has experienced significant transformation in recent years, driven by the ambitious goals outlined in Vision 2030.

Under this initiative, Saudi Arabia’s real estate landscape is evolving—from affordable housing projects to luxury living developments—reflecting the broader changes brought by the Vision 2030 reform agenda.

Speaking at the third PIF Private Sector Forum in Riyadh on Wednesday, Al-Hogail emphasized the ongoing urban transformation and the private sector's crucial role in driving it. “There are now over 600 regional hubs, coupled with economic diversification and a rapidly growing urban population,” he noted.

Vision 2030 prioritizes affordable housing and improved living standards for Saudi citizens, which Al-Hogail believes requires a redefinition of urban planning. “We must redefine the concept of the city in alignment with these economic transformations and diverse needs to ensure sustainability. This is where the concept of sustainability becomes essential.”

The minister also revealed that the municipal and housing sectors contributed more than 16 percent to Saudi Arabia’s real gross domestic product in 2024, with the real estate, construction, and building sectors receiving nearly 16 percent of total foreign investment inflows.

“In 2024, we completed three local plans, and by 2025, in partnership with the Authority Support Center, we aim to finalize over 33 master plans to accommodate the evolving needs of our cities,” Al-Hogail added.

The growing urban population in Saudi cities is driving a surge in housing demand. From July 2023 to July 2024, residential transactions in Riyadh alone increased by 51.6 percent, totaling 18,500 sales valued at SR26.6 billion, according to a report from real estate services firm CBRE.

“The hardest part—establishing the framework, legislation, and incentive programs—is now behind us. Momentum is accelerating rapidly,” Al-Hogail said.

He continued: “Today, we believe the Kingdom’s investment environment has reached a favorable stage, based on our engagement with both local and international private sectors. There are still substantial opportunities for further development.”

Al-Hogail also highlighted the significant growth in real estate financing, with the banking sector’s real estate financing portfolio rising from SR165 billion to over SR850 billion in a short period. “This shows how the private sector, when provided with a stimulating and supportive environment, can achieve remarkable growth,” he concluded.