Saudi Arabia’s real estate price index contracted by 0.7% year-on-year in the fourth quarter of 2025, marking the first contraction since the updated data series began in 2022, according to the General Authority for Statistics. This decline was driven by falling prices of residential land plots, villas, and apartments, affected by government measures aimed at cooling prices.
The government targeted price reductions by easing sales and development restrictions in areas north of Riyadh covering more than 80 square kilometers, to supply 40,000 land plots annually at prices below SAR 1,500 per square meter over five years, boosting housing supply.
The overall index decline was led by the residential sector, which fell by 2.2%, with residential land plots accounting for the largest component and recording a notable drop since 2022. Prices of villas and apartments also declined, deepening the downturn.
Geographically, property prices in Riyadh fell by 3% for the first time since the end of 2022, while prices in Makkah rose by 2.5%. In Madinah, the pace of price contraction slowed to 6.1% compared to 8.1% in the previous quarter.
Market performance was attributed to government measures, including imposing flexible fees of up to 10% annually on vacant land and unoccupied properties to encourage real estate development. Price growth in the commercial sector also slowed from 6.8% to 3.6% over the same period, as did growth in the agricultural sector from 4.3% to 4.2%.
Saudi Cabinet Approves the National Insurance Strategy
The strategy was presented to the Saudi Council of Economic and Development Affairs last November and includes a set of initiatives, such as enhancing universal health coverage through the implementation of mandatory private health insurance.
It also includes an initiative to increase compliance with non-mandatory motor insurance by implementing mechanisms that help strengthen adherence to this type of insurance and improve beneficiary experience by facilitating the disbursement of compensation for bodily injuries and enhancing road safety standards, thereby boosting confidence in the insurance sector.
This approval comes in parallel with the Saudi Insurance Authority’s direction to raise the capital of companies operating in the sector to SAR 50 billion over the next four years, compared to the current level of around SAR 25 billion, according to what was announced by the authority’s CEO, Naji Al-Tamimi, during his participation in the Global Insurance Conference held last November.
