Jeddah

Jeddah stands as Saudi Arabia's premier coastal commercial hub and a cornerstone of Vision 2030's economic diversification. With a metropolitan population approaching 5.7 million in 2025, the city attracts expatriates, pilgrims, and tourists while benefiting from major infrastructure upgrades and relaxed foreign ownership rules introduced earlier this year.

Foreign investors now face fewer barriers following the February 2025 Investment Law updates, combined with reduced mortgage down payments to 5% for nationals. These changes have driven residential transaction values up 33.8% in the first half of 2025 compared to the prior year, according to Cavendish Maxwell reports.

Market Drivers and Opportunities

Jeddah's appeal stems from several interconnected factors:

• Role as the Red Sea's primary port and gateway to holy cities, supporting logistics and religious tourism.

• Tourism surge, with millions of annual visitors bolstered by Red Sea resort developments.

• Resumed mega-projects, including Jeddah Tower (construction restarted January 2025, targeting 2028 completion) and Jeddah Central's waterfront transformation.

• Regulatory reforms opening properties to international buyers (excluding Mecca and Medina).

Average apartment prices hover around SAR 4,300-4,500 per square meter, while villas reach SAR 5,100-5,700, per mid-2025 data from sources like Sands of Wealth and Cavendish Maxwell. Premium coastal spots exceed SAR 10,000 per sqm.

Key Investment Metrics

Recent reports highlight resilient performance:

• Gross rental yields average 7.9%, fueled by expatriate demand and high occupancy (often above 90%).

• Transaction volumes rose over 20% in Q3 2025 (JLL data), with values reflecting higher-end deals.

• Moderate capital growth of 2-5% anticipated for 2025, balancing supply from new units (over 12,000 added in H1) against sustained demand.

• Commercial segments, including logistics near the port, show rental growth exceeding 6%.

These returns make Jeddah particularly suitable for income-focused portfolios, outperforming many Gulf peers in yield stability.

Distinctive Features Attracting Residents and Investors

Jeddah differentiates itself through a rare mix of heritage, leisure, and forward-looking development.

The revitalized Corniche provides one of the region's finest public waterfronts, spanning dozens of kilometers with integrated parks, sculptures, and recreational zones popular year-round.

Al-Balad's UNESCO-listed coral architecture and restored souks draw cultural tourists, with restoration efforts enhancing nearby property values without overwhelming authenticity.

Family-oriented compounds dominate northern districts, featuring international schools, sports facilities, and secure environments tailored to expatriates.

Ongoing Vision 2030 initiatives include Jeddah Central's mixed-use waterfront (opera house, marina, stadium) and northern coastal resorts, creating new lifestyle precincts.

Promising Neighborhoods for 2025 Investment

Al-Shati

Jeddah's flagship waterfront district offers direct beach access and luxury developments. High rental demand from affluent tenants supports premium pricing (SAR 8,000+ per sqm) and top-tier yields.

Al-Hamra

Central upscale area with sea views, proximity to malls, and international schools. Consistent family rentals and moderate entry prices make it a balanced choice.

Al-Rawdah

Vibrant, accessible mid-tier neighborhood experiencing commercial influx. Strong connectivity and ongoing amenities upgrades position it for steady appreciation.

Al-Basateen and North Obhur

Northern gated and emerging coastal zones appeal to long-term residents. Spacious compounds and resort-style projects offer growth potential as infrastructure matures.

Additional watch areas include Al-Marwah for transaction volume and Obhur's expanding luxury segment.

Investor Considerations

Jeddah's market in late 2025 shows maturity with controlled growth, favoring buy-and-hold strategies over speculative flips. Short-term rental opportunities exist near tourist zones, while logistics assets benefit from port expansions.

Risks include potential supply increases from off-plan deliveries and regulatory adjustments, though demand fundamentals remain robust.

Data draws from 2025 reports by JLL, Cavendish Maxwell, Mordor Intelligence, and official sources. Markets evolve quickly; professional local advice is essential for specific transactions.