Homebuyer Demand Surges in Saudi City

Saudi Arabia's residential real estate market is experiencing a divergence across major cities. Jeddah stands out with its strongest performance in recent years, recording 30,500 residential transactions totaling SAR36.6 billion in 2025. This reflects consistent end-user demand. In contrast, Riyadh shows signs of strain despite higher average transaction values, with a 31% year-on-year drop in transaction volumes. Dammam emerges as a buyer-friendly market, with sales values increasing by nearly 30% to SAR10.7 billion, driven by accessible pricing and robust economic activity.

Riyadh, though the largest market by value (SAR96.2 billion), faces affordability challenges due to higher property prices and financing costs. This has reduced buyer activity, despite population growth and housing initiatives expected to support long-term demand. Policy adjustments, including a five-year rent freeze and White Land Tax reforms, aim to encourage development and improve affordability, particularly in Riyadh. These measures are expected to recalibrate the market, making property more competitively priced and boosting activity.

New supply continues to enter the market, with Riyadh adding 13,000 units and Jeddah expanding its pipeline. Dammam is also set to add new stock, providing buyers with more options and negotiating power. The rise in White Land Tax encourages landowners to develop empty plots, potentially narrowing the gap between demand and supply, easing price pressure, and enhancing affordability.

A new foreign ownership law is expected to broaden the investor base. While external factors like oil price volatility and geopolitical tensions warrant monitoring, the Saudi residential market remains well-positioned, supported by strong demographics, infrastructure investment, and the commitment to Vision 2030.