Saudi Families Turn to Apartments as Housing Market Adjusts to New Conditions

Major cities across Saudi Arabia are witnessing a growing shift toward homeownership apartments, as families increasingly opt for smaller, more affordable housing amid changing market conditions and rising costs.

Industry professionals say apartments priced between SR500,000 ($133,000) and SR1 million are gaining popularity, particularly among smaller households. Prices vary depending on location, size, design quality, and the availability of services, with ongoing fluctuations as the market responds to recent government measures aimed at balancing supply and demand.

In Riyadh, apartment prices differ significantly by district. Units in eastern areas typically start at around SR700,000 for spaces of 150 square meters and can exceed SR1 million as size increases. In contrast, southern neighborhoods offer similar units from SR550,000 due to lower demand, while western areas start at approximately SR650,000 for larger apartments. Central and northern districts command higher prices, reflecting stronger demand and better infrastructure.

Real estate specialists say the sector is currently in a period of adjustment. Developers are reassessing project feasibility and adopting more cautious financial strategies in response to rising financing costs and shifting buyer behavior. This includes restructuring sales models, such as phased sales or partnerships with investment funds, to maintain liquidity and recycle capital.

Khaled Al-Mohsen, CEO of Ufuq Al-Ula Real Estate, said companies are adapting rather than retreating. He noted that profit margins are tightening, prompting developers to manage costs carefully and prioritize financial discipline. He added that firms capable of maintaining flexibility are likely to continue expanding, albeit at a measured pace.

Experts also point to a slowdown in sales activity, driven by weaker purchasing power and increased caution among buyers. Abdullah Al-Mosa, a real estate analyst, said the market is undergoing a rebalancing phase, with purchasing decisions becoming more calculated. While sales are no longer as rapid as in previous years, developers continue to pursue growth through revised strategies and portfolio adjustments.

Despite the rise in apartment ownership, rental prices in most Saudi cities have remained stable, according to market observers. Exceptions include parts of Riyadh, where rents have been largely unchanged for several years. Analysts attribute this stability to some property owners shifting units to short-term rental platforms, reducing supply in the long-term rental market.

Demand remains concentrated in major urban centers such as Jeddah and Riyadh, while smaller cities see weaker demand due to the availability of cheaper land for standalone housing. Prime neighborhoods in northern Riyadh, including Al-Narjis and Al-Yasmin, continue to attract buyers and record faster sales.

Homeowners say apartments are becoming a practical choice as urban populations grow and villa prices rise. Buyers cite lower costs, easier maintenance, and suitability for smaller families as key advantages. However, some concerns remain about infrastructure in newly developed areas, particularly the availability of schools and healthcare facilities.

Recent data shows property prices in Saudi Arabia declined slightly in late 2025, marking the first drop in several years. Analysts link this trend to government efforts introduced in 2025 to stabilize the housing market and address rising property costs.

The shift toward apartment ownership reflects broader changes in the Kingdom’s housing landscape, as affordability and urban development reshape buyer preferences.