73% of Saudi Arabia’s HNWI’s want to buy a new home in the next 12-months
73% of HNWI’s in Saudi Arabia are planning to buy a second home over the next 12-months, according to Knight Frank’s annual 2022 Saudi Residential Survey – https://www.knightfrank.ae/saudi-arabia-residential-survey carried out in partnership with YouGov.
The global property consultant’s annual survey spoke to 55 HNWI in the cities of Riyadh, Jeddah and Dammam.
When it comes to property preferences, HNWI in the Kingdom prefer villas (50%) to apartments (43%) for their next acquisition, according to Knight Frank.
Faisal Durrani, Partner – Head of Middle East Research, Knight Frank, explained: “The preference for villas over apartments amongst the Kingdom’s wealthy does not come as a surprise. What is interesting is how this demand varies by net worth. 57% of those with a net worth of over US$ 1 million, excluding their primary residence, are in favour of villas. Those with a net worth of US$ 0.5-1 million, however, are slightly more interested in apartments at 47%, compared to villas. What’s more, this is group is also twice as likely (11%) to be interested in branded residences”.
Harmen de Jong, Partner – Real Estate Strategy & Consulting, Knight Frank, added: There are differences at a city level too. HNWI’s who already own a property in Jeddah prefer apartments at 53%, while those owning in Riyadh strongly lean towards villas at 67%. Out of all HNWI subgroups, those who own property in Riyadh value branded residences the most at 13%”.
The survey also reveals that 55% of HNWI would use the property themselves, while 33% will make the acquisition for investment purposes.
“Those with a net worth of US$ 0.5-1 million are more likely to have dual motives with 32% of HNWI in this group contemplating a purchase for both personal and investment reasons. In contrast, 43% of those with a net worth of over US$ 1 million are twice as likely to purchase purely for investment reasons at 43% to 20%”, de Jong, said.
Home offices are a low priority
In terms of budgets for their next purchase, 24% will spend between US$ 0.8-1 million, while a further 25% will spend up to US$ 2 million. 26% plan to spend under US$ 0.6 million. 45% say their stated budgets are representative of their equity contribution, hinting at the strong demand for ultra-prime homes amongst this group.
“Developers are gearing up to quench the seemingly enormous demand for luxury homes, but understanding what will help push the transaction over the line will be crucial, especially as HNWI in the Kingdom have very different expectations for their high-end homes when compared to their global counter parts. Having a laundry room and a maid’s room, for instance are top priorities for HNWI in the Kingdom. Interestingly, a home office was the least popular type of dedicated space for all HNWI”, Durrani highlighted.
Dubai is the most preferred location outside the Kingdom
Beyond Saudi Arabia, Dubai has emerged as the most preferred potential target city, with 65% naming the emirate as a place they would like to buy a home. 19% say they would potentially spend up to US$ 0.5 million, while a further 25% will commit up to US$1 million. 25% are ready to spend between US$ 1-3 million.