In the last decade, the Kingdom has experienced a wide range construction renaissance, which led to a huge inflation. In this article, we introduce you to the construction costs in Saudi Arabia to have a better understanding in this sector.
About the Construction Sector in Saudi Arabia
This sector has witnessed a great development in the last years with an approximate percentage of 4.4%. In addition to high performance of some fields, such as energy, facilities, infrastructure and residence.
Some information indicates that the general local production of this sector has risen during multiple quarters of 2025. This means that the activity is still growing in the projects and megaprojects.
Also, the Saudi construction market is estimated to be $70 million in 2024, leaving high expectations for growing more to $91 million till 2029. Other expectations indicate the value will reach approximately $180 million till 2028, which make it one of the most active and largest markets all over the world.
Influencing Factors in Saudi Construction Sector Costs
There a bunch of factors that play an important role in determining the costs of constructions, so here are the most common ones:
- Prices of key materials like concrete, steel, glass and various finishes.
- Labor and contractor wages, which may rise due to a shortage of skilled workers.
- The project’s location, which differs in each city and district.
- Costs of renting equipment and machinery, also energy and construction services.
Also read about: The Modern Construction Projects in Saudi Arabia.
Residential Construction Costs in Saudi Arabia
Basically, this cost depends on the residential unit’s type and its aim, in other words, it refers to the targeted clients and market.
For example, the cost of residential villas may reach 3,400-7,600 SAR for every sqm, according to the finished quality. On the other hand, the residential apartments may cost 4500-8,500 SAR for each sqm.
Construction Cost Due to the Finishes
Construction costs in Saudi Arabia vary significantly depending on the level of finishing. Economic finishes require fewer resources and cover only the basics, while standard or luxury finishes use higher quality materials and more intricate details.
Also, higher finishing levels enhance the quality of interior and exterior spaces, directly impacting the final construction price.
Difference of Construction Costs in Saudi Cities
The construction cost differs in the huge Saudi cities because of the local market and the power of demand. According to some international reports, they say that Riyadh has one of the highest construction costs in the Middle East.
The other cities such as Jeddah and Khobar, the costs here differ due to the location of the project and demand, but they are less titan Riyadh in some cases.
How to Calculate Construction Cost ?
As we mentioned before, there are numerous factors that control the construction costs, so we have to determine the needs and purposes of the construction.
Then, you will be able to calculate these costs according to the purposes, such as the labor and materials. Also, you can use the construction cost calculator.
Also read about: How is Saudi Arabia Using Drones in Construction Site Inspections?.
What is the Property Construction Cost Calculator ?
It is a tool that provides an approximate financial report for those who are thinking about starting their construction business. Also, it enables the user to insert the main information of the project, such as:
- The total area.
- The construction type.
- The number of floors.
All of this information to process the data due to current market prices and the Saudi Building Code. In addition to providing detailed results that include structural (shell) and finishing cost.
Government Fees and Licences
The government fees and licences also should be considered before starting the construction. For example, the building permit fees are usually calculated based on the area, including supervision, inspection and insurance fees.
These vary across municipalities and projects, in addition to the difference due to the city and the project type.
Finally, the construction costs in Saudi Arabia is one part of a whole process that depend on various factors that you can explore with Bayut Blog and what it presents to the investors in properties and real estate sectors.
