Sales values in the capital climb to SR17.6 billion, while Dammam transactions jump nearly 60% year-on-year as new regulations shape market dynamics.
RIYADH — Saudi Arabia’s residential real estate market showed signs of recovery in the third quarter of 2025, with Riyadh recording a 19% quarterly increase in transactions and Dammam emerging as a new investment hotspot, according to a new market analysis.
Real estate advisory firm Cavendish Maxwell reported that Riyadh led the rebound with 13,000 residential sales transactions valued at SR17.6 billion ($4.69 billion) between July and September. This growth comes as the capital prepares to deliver 57,000 new housing units in 2026 and 2027.
Despite the quarterly gain, Riyadh’s sales volumes remain 44% lower than the same period last year, reflecting ongoing affordability pressures in a market that saw rapid price appreciation throughout 2024. To address these concerns, authorities implemented a five-year rent freeze in September.
“Dammam, where property is more affordable, is emerging as a new hot spot for property investment, with a year-on-year surge in buying activity from both end-users and investors,” said Sean Heckford, director of Built Asset Consulting at Cavendish Maxwell.
The eastern city recorded 3,000 transactions in Q3—a nearly 60% year-on-year increase and 37% quarterly jump—with sales values reaching SR3.2 billion.
Jeddah saw more moderate growth, with transactions rising 10% quarter-on-quarter to 7,500, though activity remains 19% below 2024 levels. Sales values in the western city climbed 9% to SR8.7 billion.
Price and Rental Trends
Riyadh continued to lead price growth, with apartment prices rising 7.5% year-on-year to an average of SR6,160 per square meter, while villa prices increased 10.1% to SR5,500 per square meter. The capital also recorded the steepest rental increases, with apartment and villa rents rising 11.8% and 10.7% respectively.
In contrast, Jeddah’s market showed greater stability, with apartment prices increasing just 1.6% and villa rents edging down 2.1%.
Regulatory Impact and Future Outlook
New regulations are expected to shape the market’s trajectory in coming years. The foreign ownership law taking effect in January 2026 is anticipated to boost demand, while the White Land Tax aims to incentivize development of vacant plots.
“Vision 2030 initiatives and infrastructure investments will be pivotal in sustaining momentum and unlocking new investment opportunities across all major cities in Saudi Arabia,” Heckford added.
The Kingdom’s Real Estate General Authority projects the property market will reach $101.62 billion by 2029, growing at an 8% compound annual rate from 2024.
United Arab Emirates Dirham Exchange Rate
