First use of sustainable aviation fuel in Saudi Arabia to be at Red Sea International Airport

RIYADH: Residential transaction values in Saudi Arabia surged 35 percent over the past 5 years to reach SR164.8 billion ($43.94 billion), according to a report from Knight Frank.

The findings showed that these deals, which accounted for 61.5 percent of all real estate agreements by total value, registered a 38 percent increase in the number of sales to just under 202,661 during the same period.

This falls in line with the Kingdom’s Vision 2030 goal to reach a 70 percent homeownership rate by 2030. It also aligns well with Saudi Arabia’s commitment to supporting access to affordable, quality housing for all citizens.

“Undoubtedly, the next big area of focus for developers will be on creating new and additional sources of demand, which may soon materialize in the much-anticipated change in foreign ownership laws,” Partner and Head of Research in the Middle East and North Africa region Faisal Durrani said.

“We continue to march toward an eventual and much-anticipated easing in international ownership laws in the Kingdom. The recent change in investor rules allowing international investors to access the property markets in the Holy Cities through listed companies, announced in January, will help to begin addressing the pent-up demand from international investors hungry to access real estate markets in the Kingdom’s Holy Cities,” he added. 

The study further revealed that several factors have contributed to the growth of residential real estate transactions in Saudi Arabia in recent years. In 2023, over 96,000 families benefited from the Kingdom’s Housing Program, which provides access to affordable home financing options. By the first half of 2024, another 55,000 families had gained from this initiative.

The release further revealed that despite record-high prices in cities like Riyadh, 45 percent of affluent Saudis are still eager to buy a home this year.

It also indicated that while the domestic homeownership rate is nearing the government’s 70 percent target for 2030, rising borrowing costs and escalating house prices are dampening demand. 

Knight Frank’s survey, conducted with YouGov and covering 1,037 households in the Kingdom — including 100 Saudi-based expats — highlighted a reduced interest in property purchases among first-time and current homeowners.

“What we are experiencing now is an organic slowing in demand as the 70 percent home ownership target approaches and as residential values start to peak in the current cycle. The rampant house price growth across the country, too, is curbing the appetite to purchase,” Regional Partner in Strategy and Consulting in Saudi Arabia at Knight Frank, Harmen de Jong, said.

“This has been evidenced by our survey results, as among our respondents, just 33 percent plan to buy a home or upgrade their accommodation in 2025, which is down on the 40 percent figure we recorded in 2023, which underscores the success the authorities have had in boosting home ownership levels,” he added. 

The analysis unveiled that first-time buyers’ demand for home purchases has decreased to 29 percent, down from 40 percent in 2023 to 84 percent in 2022. 

The property firm highlighted that the government’s initiatives to increase homeownership among Saudi nationals, which reached 63.7 percent by the end of 2023, are now bringing the target of 70 percent by 2030 within close reach.

In Riyadh, apartment prices have increased by 75 percent over the past five years, while villa prices have risen by 39 percent during the same timeframe. 

The high-interest-rate environment, with current levels at 5 percent compared to 1 percent in 2021, is further contributing to the growing factors reducing demand.

LONDON: European budget airline Wizz Air is launching direct flights between London Gatwick Airport and the Saudi city of Madinah this summer.

The non-stop daily flights from Aug. 1 will use new Airbus A321XLR aircraft, which can fly for up to 11 hours and burn 30 percent less fuel per seat than older aircraft.

Wizz Air’s first flight of the new-generation plane will take place from Gatwick to Jeddah on March 31, The Independent reported.

The airline already operates almost 100 routes across the Middle East, and its expansion into the Kingdom aligns with the Saudi Vision 2030 reform plan.

Saudi Arabia is planning to expand air connectivity to more than 250 destinations around the world as part of wider ambitions to boost tourism, according to Aviation Week.

Travelers seeking to fly from the UK to Madinah must currently take connecting flights. The new service direct to the holy city will cost £233.99 ($295), with more than 174,000 seats available per year on the route, which will have a flight time of about seven hours.

Marion Geoffroy, managing director of Wizz Air UK, said the Gatwick-Madinah route is “an important milestone for the airline, as we continue to widen our network from the UK beyond Europe.”

She added: “This new direct route will give thousands of travelers the chance to connect with a city rich in culture and history, for an affordable price.”

Gatwick’s vice president of aviation development, Stephanie Wear, said: “It is great to be able to offer more choice to our passengers with a second destination in Saudi Arabia, particularly as Madinah is considered the second of the three holiest cities in the Islamic tradition.”

Origin and destination traffic between London and Madinah reached almost 158,000 two-way passengers last year, making it the sixth-largest city pair between Europe and Saudi Arabia, Aviation Week reported.

Wizz Air launched its first service to the Kingdom in September 2022. The ultra-low-cost carrier offers flights from Jeddah to Bucharest, Budapest, Milan, Rome and Vienna; Riyadh to Budapest and Vienna; and Dammam and Madinah to Abu Dhabi.