Rooftop Extension Economics in 2025: How to Turn Your Roof Into a Golden Investment Asset

Introduction: The New Land in the Sky

In an era where the price per square meter in some Riyadh neighborhoods has reached astronomical figures, and a modest apartment now costs what would have built an entire villa years ago, Saudi citizens are seeking creative solutions to expand their living space or generate additional income to help pay off their mortgages.

This is where the "rooftop extension" or "roof" emerges as one of the smartest investment options available. That neglected space atop the house, previously used only for water tanks and satellite dishes, has today transformed into "new land" that can be invested in housing married children or renting out for a steady monthly income.

However, this investment, despite its appeal, carries fundamental challenges: strict municipal requirements that could lead to violations and demolition orders, engineering challenges related to heat, insulation, and structural loads, and costs that may surprise those who haven't studied the project properly.

In this comprehensive guide, we provide everything you need to know before deciding to build a rooftop extension: from updated 2025 legal requirements to actual costs, the best insulation and execution solutions, along with realistic investment return calculations.

From Neglected Space to Investment Asset

Two decades ago, the roof in a Saudi home was merely the forgotten "back of the house": rusty water tanks, hanging laundry, and perhaps some stored old items. Today, the perspective has fundamentally changed with rising real estate prices and changing lifestyles.

Why Has the Rooftop Extension Become a Strategic Choice?

1. The Huge Price Gap

The average price for a 150 sqm apartment in middle-class Riyadh neighborhoods ranges between 500,000 and 800,000 SAR. According to market reports, the average apartment price per square meter in Riyadh is approximately 4,939 SAR. In contrast, the cost of building a rooftop extension of the same area (turnkey with good finishing) ranges between 250,000 and 350,000 SAR. The difference reaches 50% or more!

2. Solving Children's Housing Problem

With rising marriage and housing costs, having a married son stay in the family home has become a logical economic choice. The rooftop extension provides complete independence (private entrance, separate utilities) while keeping the son close to his family. This pattern is common in extended Saudi families, where the family gathers while maintaining each unit's privacy.

3. Additional Income Source for Loan Repayment

In cities like Riyadh and Jeddah, a 120-150 sqm apartment can be rented for 25,000 to 40,000 SAR annually. Rental yields in Riyadh reach 8.89%, and about 7.89% in Jeddah according to market indicators. This income can cover a significant portion of the monthly mortgage payment.

4. Increased Property Value

A villa with a licensed rooftop extension commands a higher market value than one without. Buyers see additional housing potential or a ready income source. In a market experiencing growing demand for residential units, this is a real competitive advantage.

Simplified Feasibility Study

Let's take a practical example: building a 120 square meter rooftop extension in Riyadh:

Estimated Cost (Turnkey - Good Finishing):

Lightweight construction (metal frame + panels): 120 sqm × 500 SAR = 60,000 SAR

Medium finishing: 120 sqm × 1,100 SAR = 132,000 SAR

Advanced thermal insulation: 120 sqm × 120 SAR = 14,400 SAR

Utility connections (electricity, water, sewage): 15,000 SAR

Air conditioning (3 split units): 12,000 SAR

Licensing fees and structural study: 8,000 SAR

Approximate Total: 241,400 SAR

Expected Return (If Rented):

Estimated annual rent (middle-class neighborhood): 30,000 SAR

Annual return: 30,000 ÷ 241,400 = 12.4%

Capital recovery period: approximately 8 years

This return far exceeds bank deposit returns (3-5%), plus property value appreciation over time. A real investment by all measures!

Compliance with Building Code and Municipal Requirements 2025

Before dreaming about numbers and returns, you must first understand the regulatory framework. Building an extension without a permit or violating requirements could lead to disaster: fines, demolition orders, or even problems when selling or transferring ownership. Compliance is not optional but essential.

Updated Residential Building Requirements (July 2024)

The Ministry of Municipal, Rural Affairs and Housing issued updated residential building requirements on July 14, 2024, aimed at meeting beneficiaries' aspirations according to best international practices. Here are the key points regarding rooftop extensions:

1. Permitted Building Ratio

The building ratio in the upper extension shall not exceed 70% of the floor area below it, including vertical circulation elements (stairs and elevators). This ensures adequate spaces for ventilation and natural lighting.

Practical Example: If the first floor is 200 square meters, the maximum extension = 200 × 70% = 140 square meters.

2. Building Ratios for Other Floors

Ground floor including ground annexes: not exceeding 75% of land area.

First floor: not exceeding 75% of plot area.

These updated ratios (previously 70%) provide greater flexibility for owners.

3. Setbacks and Privacy

Opening windows that directly overlook neighbors is prohibited, a fundamental requirement for maintaining privacy in Saudi society. Side setbacks for residential villas reduced from 2 meters to 1.5 meters, providing additional building space. Setbacks from the street must be maintained to preserve the city's visual character.

4. Permitted Heights

Maximum height for residential villas increased from 12 meters to 14 meters. Side fence heights increased from 3.5 meters to 4.5 meters. If the extension is designated for services only (laundry room, storage), its height may not count toward total height. However, converting it to residential requires precise height calculations.

5. Parking Requirement

If the upper extension is used as an independent residential unit, an additional parking space must be provided within the property boundaries. This important requirement should be planned in advance.

6. Floor Separation Permission

An important amendment: allowing each villa floor to be an independent residential unit with a separate entrance. This opens wide investment horizons for villa owners.

Saudi Building Code 2024

The updated Saudi Building Code 2024 was issued and becomes mandatory from June 30, 2025. Updates include adding 3 new codes, including the seismic design code and the existing concrete structure repair code.

Structural Requirements:

The existing building's capacity to bear additional extension loads must be verified. This requires a structural study from an accredited engineering office, which is mandatory (not optional) for obtaining a permit.

Thermal Insulation Requirements:

The Saudi Building Code specifies precise thermal insulation standards (U-value), especially for roofs directly exposed to sunlight. Properly insulated buildings can save 35-45% of energy consumption compared to uninsulated buildings.

Safety Requirements:

Fire suppression systems as needed, specification-compliant building materials, and disability accessibility standards.

Licensing Steps

Step 1: Structural Study

Engage an accredited engineering office to study the existing building's capacity to support the extension. The engineer examines foundations, columns, and ceilings. Cost: 3,000 - 8,000 SAR depending on building size.

Step 2: Architectural Design

Design the extension according to municipal requirements, considering ratios, setbacks, and heights. The exterior design should harmonize with the original building's appearance.

Step 3: Submit License Application

Through the "Balady" electronic platform, attaching: ownership deed, architectural and structural drawings, structural study, and identification.

Step 4: Fees

Extension building permit fees are approximately 30 SAR per square meter. Adding an upper floor: 60% of new building fees.

Step 5: Execution and Supervision

Construction under engineering supervision, adhering to approved plans. Any modification requires prior approval.

Step 6: Completion Certificate

After completion, obtain a building completion certificate to add the extension to the deed. This step is necessary for official documentation.

Implementation Challenges: Heat, Insulation, and Weight

Building a successful rooftop extension isn't limited to complying with legal requirements but requires smart engineering solutions for the unique challenges of living in "the home's sky."

Challenge One: Heat - The Greatest Enemy

The roof in Saudi climate is exposed to direct sunlight throughout the day. In summer, roof surface temperature can reach 70-80°C! In Jeddah, for example, temperatures exceed 50°C in summer months. Without professional insulation, the extension becomes an "oven" unfit for habitation, and electricity bills become catastrophic.

Why Are Upper Extensions More Prone to Heat?

The roof is fully exposed to sunlight (unlike lower floors protected by a roof above). No natural insulating layers exist between the extension and the sun. Heat accumulates throughout the day and transfers inside.

Comprehensive Thermal Insulation Solution:

1. Roof Insulation with Spray Polyurethane Foam (SPF) - Most Important

Spray Polyurethane Foam (SPF) is the optimal choice for Saudi climate. It has the highest thermal insulation value (R-value) among available insulation materials. Works as both water and thermal insulation (no need for separate waterproofing layer). Applied at 30-50mm thickness and can prevent 80% of heat absorption! Lifespan exceeds 20-30 years with simple maintenance. Cost: 80-120 SAR per square meter.

2. Cool Roof Reflective Coating

White reflective solar coating can reduce surface temperature by 25-40°C. Reflects up to 70% of sunlight instead of absorbing it. Products like "Jazeera Cool Roof" are available locally and combine thermal and waterproof insulation. A study in Saudi Arabia showed that a Riyadh factory reduced cooling costs by 23% within 18 months using this technology. Cost: 40-60 SAR per square meter.

3. Wall Insulation

Insulated Concrete Blocks (AAC): provides built-in thermal insulation. Or add an internal insulation layer of rock wool or polystyrene (5-7cm thick). Double walls with insulated air gaps are excellent for extremely hot areas.

4. Insulated Windows

Double glazing with heat-reflective coating (Low-E Glass). Windows are a major weak point in insulation, potentially leaking 25-30% of heat. PVC frames or aluminum with thermal break are better than regular aluminum. Additional cost for double glazing: 150-250 SAR per square meter.

5. Smart Ventilation

Ventilation openings at wall tops or ceiling help expel accumulated hot air. Exhaust fans in areas where heat accumulates. Double roof with ventilation gap significantly reduces heat transfer.

Challenge Two: Loads on Existing Building

The existing building was designed to bear specific loads. Adding a rooftop extension means additional loads on foundations and columns. Ignoring this could lead to cracks, ceiling sagging, or in serious cases, collapses. This challenge is why structural studies are mandatory.

Smart Solutions for Load Reduction:

1. AAC Lightweight Blocks (Autoclaved Aerated Concrete)

Instead of traditional cement blocks (10-15 kg/block), use AAC lightweight blocks (5-7 kg/block). Saves 40-50% weight with better thermal insulation. Available in Saudi Arabia from several local manufacturers.

2. Light Steel Frame

Modern building system using light gauge steel frame with insulated gypsum board panels for interior walls and cement board for exterior surfaces. Advantages: 50-60% lighter than traditional construction. Faster execution (weeks instead of months). Design flexibility. Fire and moisture resistant (treated panels). Available in Saudi Arabia from companies like "Mada Gypsum" and "Khayat Gypsum." Cost: 400-550 SAR per sqm for structure.

3. Sandwich Panel Ceilings

Instead of pouring new concrete ceiling, use insulated sandwich panels. Lightweight, quick installation, and excellent thermal insulation. Ideal for sloped or flat roofs.

4. Mandatory Structural Study

An accredited structural engineer assesses the building's bearing capacity through: examining original building plans, visual inspection of columns and foundations, additional load calculations. May recommend reinforcing some columns if necessary (additional cost 10,000-30,000 SAR).

Actual Construction Costs 2025

Rooftop extension construction costs vary significantly depending on region, materials, and finishes. Here's a realistic breakdown of 2025 prices based on market data:

Construction Prices by Phase

Structure Phase (Frame, Walls, and Roof):

Traditional construction (cement blocks + concrete): 550 - 700 SAR/sqm

Lightweight construction (metal frame + panels): 400 - 550 SAR/sqm

AAC lightweight block construction: 500 - 650 SAR/sqm

Finishing Phase:

Economic/commercial finishing: 600 - 800 SAR/sqm

Medium finishing (standard deluxe): 900 - 1,200 SAR/sqm

Good finishing (deluxe): 1,200 - 1,500 SAR/sqm

Luxury finishing (super deluxe): 1,600 - 2,500+ SAR/sqm

Total Turnkey:

Economic finishing: 1,100 - 1,500 SAR/sqm

Medium finishing: 1,500 - 1,900 SAR/sqm

Good finishing: 1,900 - 2,300 SAR/sqm

Luxury finishing: 2,300 - 3,500+ SAR/sqm

Additional Costs to Account For

Licenses and Studies:

Building permit fees: ~30 SAR/sqm

Structural study: 3,000 - 8,000 SAR

Architectural design: 3,000 - 10,000 SAR

Engineering supervision: 5,000 - 15,000 SAR

Advanced Thermal Insulation:

Polyurethane foam for roof: 80 - 120 SAR/sqm

Cool Roof reflective coating: 40 - 60 SAR/sqm

Additional wall insulation: 30 - 50 SAR/sqm

Utility Connections:

Electricity (separate meter): 5,000 - 10,000 SAR

Water and sewage: 5,000 - 15,000 SAR

Phone/internet line: 500 - 1,500 SAR

Air Conditioning:

Split unit (1.5 - 2.5 tons): 3,000 - 5,000 SAR/unit

A 120 sqm apartment typically needs 3-4 units

Detailed Example: 100 Square Meter Extension

Scenario 1: Traditional Construction + Medium Finishing

Structure: 100 × 650 = 65,000 SAR

Finishing: 100 × 1,100 = 110,000 SAR

Advanced insulation: 100 × 100 = 10,000 SAR

Licensing and studies: 12,000 SAR

Utility connections: 15,000 SAR

Air conditioning (3 units): 12,000 SAR

Total: 224,000 SAR (2,240 SAR/sqm)

Scenario 2: Lightweight Construction + Medium Finishing

Structure (metal frame): 100 × 500 = 50,000 SAR

Finishing: 100 × 1,100 = 110,000 SAR

Advanced insulation: 100 × 100 = 10,000 SAR

Licensing and studies: 12,000 SAR

Utility connections: 15,000 SAR

Air conditioning (3 units): 12,000 SAR

Total: 209,000 SAR (2,090 SAR/sqm)

Lightweight construction saves approximately 15,000 SAR in this example, with the added advantage of reducing loads on the existing building.

Golden Tips for a Successful Project

Before Starting

1. Verify the Deed and Original License

Ensure the ownership deed allows additional construction and that the original villa is licensed and matches the plans. Any previous violations may hinder obtaining a new permit.

2. Study the Rental Market

If renting is your goal, study rental prices in your area to confirm investment viability. Some neighborhoods have higher demand than others.

3. Consult Multiple Contractors

Get at least 3-4 price quotes. The cheapest isn't always best; focus on quality and reputation.

4. Plan for the Future

Even if the extension is for children now, design it to be rentable later (separate entrance, independent utilities).

During Execution

1. Don't Skimp on Thermal Insulation

This is the most important item for rooftop extensions. Poor insulation means high electricity bills and uncomfortable residents. Additional insulation investment is recovered within a few years from electricity savings.

2. Focus on Ventilation

Natural ventilation openings, exhaust fans in bathrooms and kitchen, and windows that can open for natural airflow.

3. Choose High-Quality Windows

Double glazing with reflective coating provides thermal and sound insulation. Poor windows waste all insulation efforts.

4. Document Everything

Photos of work stages, material invoices, contractor contracts. These documents are important for warranties and any future disputes.

After Completion

1. Obtain Completion Certificate

Don't neglect this step. Without a completion certificate, the extension isn't officially documented and you may face problems when selling.

2. Update the Deed

Add the extension to the deed to document the increase in built area.

3. Insulation Maintenance

Inspect insulation and reflective coating every 5-7 years. May need renewal to maintain effectiveness.

Rooftop Extension Utilization Ideas

A rooftop extension isn't just a rental apartment or children's housing. There are various uses that add value:

1. Independent Residential Apartment

The most common option: two or three rooms, living room, kitchen, two bathrooms. Ideal for renting or children's housing.

2. Studio or Small Apartment

Smaller space (60-80 sqm) suitable for singles or newlyweds. Rents faster and demand is high in some neighborhoods.

3. Home Office

With remote work becoming common, a separate office in the extension provides privacy and separation between work and personal life.

4. Family Gathering Room with Terrace

Large lounge with outdoor terrace for occasions and family gatherings. Additional villa feature.

5. Independent Guest Room

For families that frequently receive guests, an independent extension provides privacy for guests and family.

6. Domestic Worker Housing

One or two rooms with bathroom and small kitchen. Provides privacy for family and workers.

Frequently Asked Questions

How much does building a rooftop extension cost in Saudi Arabia 2025?

Total cost (turnkey with medium finishing) ranges between 1,500 - 2,000 SAR per square meter. A 100 sqm extension costs approximately 150,000 - 200,000 SAR. Cost varies by region, construction type, and finishing level.

What is the permitted building ratio for rooftop extensions?

According to 2024 requirements, the building ratio in the upper extension shall not exceed 70% of the floor area below it, including vertical circulation elements (stairs and elevators).

Does a rooftop extension require a structural study?

Yes, a structural study is mandatory for obtaining a building permit. It costs between 3,000 - 8,000 SAR and assesses the existing building's capacity to bear additional loads.

What's the best way to insulate a rooftop extension from heat?

The optimal solution is an integrated system: 1) Roof insulation with polyurethane foam (30-50mm), 2) Cool Roof reflective coating, 3) Wall insulation, 4) Double glazing for windows. This system can save 35-45% of electricity consumption.

Is lightweight construction (metal frame) safe for habitation?

Yes, light steel frame construction is an internationally approved technique compliant with Saudi Building Code. It features light weight, fast execution, and fire resistance (treated panels). Several Saudi companies offer this service with high quality.

What's the investment return from renting an extension?

Annual rental yield in Riyadh ranges between 8-12% of investment value. An extension costing 200,000 SAR can be rented for 24,000 - 36,000 SAR annually depending on location and finishing.

Can a rooftop extension be built on any villa?

Not necessarily. It depends on: the structural frame's capacity to bear additional loads, meeting permitted building ratios, absence of previous building violations, and municipal approval for licensing.

Conclusion: Invest in Your Home's Sky

The rooftop extension is no longer a luxury but has become a strategic investment amid rising real estate prices. At a cost much lower than buying a ready apartment, you can provide housing for children or generate rental income that helps pay off your mortgage.

The key is proper planning: comply with requirements to avoid violations, invest in thermal insulation to save electricity and ensure occupant comfort, and choose a reliable contractor who executes work with quality.

The roof that was merely a place for tanks and satellite dishes can transform into an investment asset generating income for years. The opportunity is in your home's sky—are you ready to seize it?

At Raghdan, we help you find the right property whether you're looking for a villa with buildable roof space or a ready-to-live apartment. Browse our properties and choose what suits your needs and budget.