With Riyadh's market pushing forward a series of large and mega projects aimed at diversifying Saudi Arabia's economy, the capital is facing serious challenges. Industry experts point out that while these projects contribute to long-term economic development, they also create significant "capacity bottlenecks," driving up construction costs and potentially exacerbating housing shortages.

According to the latest data reports, Riyadh currently ranks as the most expensive city in the Middle East in terms of construction costs, averaging $2,593 per square meter. This figure surpasses Dubai's $1,874 and Abu Dhabi's $1,844 per square meter.

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Behind this cost escalation lies the significant diversion of resources towards various large-scale infrastructure and commercial projects, straining the supply of manpower and materials needed for housing construction. Experts warn that while these mega projects promise long-term economic benefits, they also stress the local construction industry and material supply chains, thereby increasing construction costs and exacerbating housing supply shortages.

"The current high construction costs mean higher housing prices for ordinary citizens and impact the availability of affordable housing," experts note. They anticipate that this situation will persist, especially against the backdrop of expected high inflation rates in 2024, posing a serious challenge for Riyadh residents seeking economically feasible housing.

Nevertheless, experts also acknowledge that these large-scale projects are laying a solid foundation for Riyadh's future economic development, bringing new job opportunities and infrastructure improvements that will yield widespread benefits for the city and its residents in the long run. However, effectively managing costs during project construction and ensuring continuous growth in housing supply remain critical issues that both the government and the market must address together.