New laws and tax reforms are expected to boost real estate demand and accelerate development activity in the Kingdom of Saudi Arabia throughout 2026 and beyond.
Saudi Arabia’s residential real estate market recorded mixed performance across its major cities in the third quarter of 2025, reflecting variations in supply and demand dynamics from one city to another.
In Riyadh, residential sales transactions increased by 18.7% quarter-on-quarter to reach 13,000 transactions, despite a sharp annual decline of 44.3% compared to the same period last year. This year-on-year decrease is attributed to affordability pressures resulting from the rapid price surge witnessed in 2024.
Rents in Riyadh saw a notable jump, rising by 11.8% for apartments and 10.7% for villas on an annual basis. To address these challenges, the government imposed a five-year rent freeze starting in September 2025, as the city prepares to welcome 57,000 new housing units by 2026 and 2027. The total value of residential property sales in Riyadh exceeded SAR 17.6 billion ($4.69 billion) during the third quarter of the same year.
In Dammam, sales reached their highest levels in years, with 3,000 transactions recorded in the third quarter of 2025, representing a 60% increase compared to the same period last year. The total value of sales there amounted to approximately SAR 3.2 billion ($850 million). Meanwhile, Jeddah recorded a 10% increase in sales transactions, reaching 7,500 deals with total sales valued at around SAR 8.7 billion ($2.31 billion), marking a 9% rise compared to the second quarter of the year.
Despite the quarter-on-quarter improvement in performance, Riyadh and Jeddah experienced annual declines in both sales volume and value. Riyadh recorded a 44% drop, while Jeddah saw a decline of 19%.
Officials from Cavendish Maxwell, led by Sean Hickeyford, stated that the surge in property prices in Riyadh during 2024 contributed significantly to higher sale and rental prices. This prompted the government to introduce strict measures, including rent freezes, to curb the affordability crisis.
In contrast, prices in Jeddah remained relatively stable, while Dammam emerged as a new destination for real estate investment due to its competitive pricing and growing purchasing activity from both consumers and investors.
According to a recent report on the Kingdom’s residential real estate market, sale prices for apartments and villas in Riyadh, Jeddah, and Dammam increased during the third quarter of 2025, with gains most pronounced in Riyadh. The capital saw average apartment prices rise to SAR 6,160 ($1,642) per square meter, up 7.5% year-on-year, while average villa prices increased by 10.1% to reach SAR 5,500 ($1,466) per square meter.
In Jeddah, the average apartment price rose to SAR 4,360 ($1,162) per square meter, reflecting a 1.6% increase, while villa prices climbed to SAR 5,140 ($1,370), up 3.1%. Apartment and villa prices in Dammam also increased by 5.8% and 3.2%, respectively.
In terms of rentals, Riyadh recorded the highest annual growth rates among the three cities, with apartment rents rising by 11.8% and villa rents by 10.7%. Jeddah experienced a 5.6% increase in apartment rents, alongside a slight decline of 2.1% in villa rents. In Dammam, apartment and villa rents increased by 4.8% and 2.2%, respectively.
