Wealthy Muslims look to purchase homes in Saudi holy cities
Wealthy Muslims are prepared to spend nearly $2 billion on purchasing homes in the holy cities of Makkah and Medinah, new research has found.
Property consultancy Knight Frank surveyed just over 500 high-net-worth Muslims from nine Muslim-majority countries - Algeria, India, Indonesia, Iran, Iraq, Malaysia, Pakistan, Singapore and Turkey.
The respondents collectively own more than 2,250 homes, with 29% already owning between 3-5 properties.
The survey findings align with Saudi's announcement of new premium residency scheme to attract and retain foreign talent, including a premium visa for owners of property worth at least 4 million Saudi riyals.
“The fact that 84% of global HNWI interested in purchasing in Saudi would like to do so in one of the holy cities underscores the depth of pent-up demand for home ownership from outside the country,” said Faisal Durrani, partner – head of research, MENA at Knight Frank.
“And the demand appears to be genuine, with 48% of those looking to purchase a property in Makkah intending to use it as a main residence.”
The findings suggest that respondents - defined in the survey as individuals with a 'personal net worth of over $500,000, excluding the value of their main home - were most keen to purchase real estate in Makkah (30%), followed by Riyadh (25%) and Medinah (19%).
The wealthy Muslims surveyed allocated an average budget of $4.7 million for the purchase of a property in the holy cities. Nearly half (40%) of those considering Makkah for buying a home are prepared to spend upward of $5 million.
“The $4.7 million average Muslim global HNWI budgets for homes in the holy cities will undoubtedly give further impetus to the giga project developers, many of whom we expect will begin marketing homes from upwards of $1 million, which sits above the bulk of domestic Saudi budgets," said Durrani.
One-fifth (22%) of wealthy Muslims surveyed are keen to complete a purchase this year, with a further 33% wanting to own a property in the kingdom in the next 12-24 months.
The survey further revealed that two-thirds (66%) of those keen on owning a house in Makkah prefer to pay the full amount at the point of transaction, while 54% of the respondents considering Medinah for investment are keen to pay for the property in full at the time of purchase.
