Riyadh Skyline
Riyadh Skyline. Neom, Saudi Arabia’s $500 billion super-city, tops the wish-list of Saudi home buyers according to Knight Frank’s annual 2022 Saudi Residential Survey. Image Credit: Bloomberg

Riyadh/Jeddah: Neom, Saudi Arabia’s $500 billion super-city, tops the wish-list of Saudi home buyers according to Knight Frank’s annual 2022 Saudi Residential Survey.

The study finds that homes in this new city as the most preferred location to buy a home by the Kingdom’s homeowners, first-time buyers and high networth Individuals (HNWI).

The global property consultant’s annual survey, which separately spoke to 1,003 households and 55 HNWI in Riyadh, Jeddah and Dammam has found that the appeal of Neom amongst the Kingdom’s planned Giga projects is unanimous.

“The Kingdom’s new Giga projects represent a seismic shift in not only the quantum of real estate development unleashed in the kingdom, but also spectacularly mark the birth of what could be the emergence of one of the world’s hottest new real estate markets and Saudi nationals are alive to this fast-emerging reality,” said Faisal Durrani, Partner – Head of Middle East Research, Knight Frank.

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The site of Neom city in the Tabuk province, in north-west Saudi Arabia.

Ready to pay premium

Neom has clearly captured the imagination of Saudi’s all across the Kingdom, with the appetite to purchase here amongst tenants, homeowners and HNWI running above 70 per cent.

“Most are even willing to pay a premium for the privilege of living, or owning a home here. Developers have a real opportunity to tap into this surging demand and meet the clearly laid out expectations of potential buyers,” said Durrani.

The excitement around Neom is clear, but now work must begin to deliver on the promises made and more importantly, deliver a city that caters to the aspirations of the Kingdom’s hopeful home buyers and eager investors alike, says Knight Frank.

Creating a city from scratch, with a vibrant economy that draws in and retains talent is no easy feat, but numerous examples exist around the world and now could well be Neom’s turn, but challenges around delivering Neom could be addressed through private sector participation

“NEOM’s planners have done an incredible job of promoting and positioning the city as THE place to live and the message has been received loud and clear. Private sector participation can take many forms to help alleviate some of the challenges of delivering the ambitious volume of real estate planned,” said Harmen de Jong, Partner – Real Estate Strategy & Consulting, Knight Frank.

HNWIs keen on Neom

Knight Frank’s HNWI survey has revealed that the majority of HNWI (60 per cent) also name Neom as the Giga project they would most be interested in buying a home in, with 97 per cent of this group saying they are likely to make a purchase.

While The Red Sea Project also emerged as a top location amongst the1003-households Knight Frank surveyed, it comes second to Neom overall.

“Looking more closely at the results paints The Red Sea Project as more of an aspiration for would-be buyers and investors, rather than somewhere they will actually transact. Indeed ‘international-level luxury experiences’ at 50 per cent was cited by HNWI as the main attraction for buying in The Red Sea Project, while for NEOM it is ‘investing in the Kingdom’s Future / Vision 2030’ that is the main driver at 45 per cent,” said Durrani.

When it comes to the likelihood of making a purchase, 56 per cent would be likely to buy in The Red Sea Project while for NEOM this figure is higher at 72 per cent.