Saudi property market shifts as Riyadh hits $4.7bn, Jeddah stabilises and Dammam surges

Riyadh residential real estate sales values in reached SR17.6bn ($4.69bn) in Q3 2025, as the capital prepares to deliver 57,000 new homes in 2026 and 2027, according to new research Cavendish Maxwell.

Residential transactions in Riyadh totalled 13,000 between July and September 2025, up nearly 19 per cent quarter-on-quarter.

The city delivered 10,000 new units in the first nine months of the year, with a further 6,000 scheduled during Q4.

Saudi real estate

In Dammam, which makes its debut in Cavendish Maxwell’s latest KSA report, residential sales hit their highest levels for several years. Transactions reached 3,000 in Q3 2025—up nearly 60 per cent year-on-year and 37 per cent on Q2—while sales values climbed to SR3.2bn ($850m).

Jeddah also recorded a quarterly boost, with transactions rising 10 per cent to 7,500 and sales values increasing 9 per cent quarter-on-quarter to SR8.7bn ($2.31bn).

Despite quarterly gains across all three cities, Riyadh and Jeddah both posted year-on-year declines, largely driven by affordability pressures. Sales fell 44 per cent in Riyadh and 19 per cent in Jeddah.

Riyadh-based Sean Heckford, Director of Built Asset Consulting at Cavendish Maxwell, said: “Riyadh’s rapid price appreciation in 2024 led to sharp increases in both sales and rental prices, prompting the Government to introduce a five-year rent freeze to address affordability concerns.

“In Jeddah, price conditions have stabilised and affordability pressures have eased slightly. Meanwhile 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.”

KSA residential market report

Cavendish Maxwell’s latest research also shows:

• Q3 sales prices for apartments and villas rose across all three cities, with the biggest increases in Riyadh
• Apartment rental rates increased in all three cities, led by Riyadh
• Villa rents rose in Riyadh and Dammam, but dipped slightly in Jeddah
• A total of 22,800 new homes are expected to be delivered across the three cities by the end of 2025
• A further 105,000 units are planned for 2026 and 2027
• KSA’s White Land Tax reforms and new foreign ownership laws are expected to accelerate demand

Sales prices: Riyadh leads gains

The strongest sales price growth was recorded in Riyadh, where average apartment prices rose to SR6,160 ($1,642) per square metre in Q3, up 7.5 per cent year-on-year. Villa prices reached SR5,500 ($1,466) per square metre, an annual increase of 10.1 per cent.

In Jeddah, apartment prices rose 1.6 per cent to SR4,360 ($1,162) per square metre, while villa prices increased 3.1 per cent to SR5,140 ($1,370). In Dammam, apartment prices climbed 5.8 per cent year-on-year and villa prices rose 3.2 per cent.

Rental rates: capital sees sharpest rises

Riyadh recorded the largest rental increases, with apartment rents up 11.8 per cent year-on-year and villas up 10.7 per cent. Jeddah apartment rents rose 5.6 per cent, while villa rents edged down 2.1 per cent. In Dammam, apartment rents increased 4.8 per cent and villa rents rose 2.2 per cent.

Combined, the three cities delivered 13,500 new homes in the first nine months of 2025, with full-year deliveries expected to reach 22,800. By year-end, Riyadh will have added 16,000 homes, Jeddah 5,000 and Dammam 1,800.

Looking ahead, Riyadh has 57,000 homes in the pipeline for 2026 and 2027, compared with 36,000 in Jeddah and 12,000 in Dammam.

Saudi real estate forecast

New laws and tax reforms will shape market dynamics from 2026. The foreign ownership law, effective January 2026, will boost buyer activity, while the recently introduced White Land Tax incentivises landowners to sell or develop plots.

Cavendish Maxwell said the five-year rent freeze announced in September will improve affordability in Riyadh but could reduce landlords’ incentives to maintain properties or invest in new stock in the short term.

Heckford added: “Saudi Arabia’s Q3 residential market performance reflects a transitional phase marked by strong macroeconomic fundamentals and evolving regulatory measures. Despite affordability challenges in Riyadh, demand remains resilient, supported by the new laws and tax systems.

“Jeddah demonstrates stability with balanced supply and demand dynamics, and Dammam stands out as a growth hotspot driven by affordability and investor interest. Vision 2030 initiatives and infrastructure investments will be pivotal in sustaining momentum and unlocking new investment opportunities across all major cities in KSA.”