Saudi Real Estate Prices Dip as Residential Weakness Offsets Commercial Gains

Saudi Arabia’s real estate market recorded a modest decline in the first quarter of the year, as falling residential prices outweighed gains in the commercial segment, according to newly released official data.

Figures from the General Authority for Statistics showed the Kingdom’s real estate price index stood at 103.3 in the opening quarter, down 1.6 percent compared to the same period last year. On a quarterly basis, prices slipped by 0.2 percent from the final three months of 2025.

The downturn was largely driven by the residential sector, which holds the largest share of the index. Residential prices dropped 3.6 percent year-on-year, with land values declining by 3.9 percent. Villa prices fell sharply by 6.1 percent, while apartment prices decreased by 1.1 percent. In contrast, prices for residential floors edged up slightly by 0.6 percent.

The figures come as authorities continue efforts to cool rising property costs, particularly in Riyadh. In September, the government introduced regulations aimed at stabilizing the housing market, including a five-year freeze on rent increases for both residential and commercial properties within the capital’s urban boundaries.

Despite the annual decline, there were signs of short-term recovery. Compared to the previous quarter, residential prices rose 0.5 percent, supported by a 1.7 percent increase in land values.

Saudi Arabia’s property market remains central to the country’s economic transformation plans under Vision 2030, which aims to reduce reliance on oil revenues and expand sectors such as tourism and business. The Real Estate General Authority has projected the market will reach $101.62 billion by 2029, growing at an annual rate of around 8 percent.

In contrast to the residential segment, the commercial sector showed stronger performance on a yearly basis. Prices rose 3.4 percent in the first quarter, driven by a 3.6 percent increase in commercial land values and a 2.6 percent rise in building prices. However, shop and gallery prices declined by 3.5 percent.

Quarter-on-quarter data painted a different picture, with commercial real estate prices falling 2.3 percent due to declines in land and building costs.

Regional data revealed mixed trends across the Kingdom. The Riyadh region recorded a 4.4 percent drop in overall real estate prices, while the Makkah Region saw a smaller decline of 0.7 percent. Sharper decreases were reported in Al-Baha, Hail, the Northern Borders and Al-Qassim.

Meanwhile, the Eastern Province posted the strongest growth at 6.9 percent, followed by gains in Najran, Tabuk and Asir.

The latest data highlights a market in transition, with policy measures and shifting demand continuing to reshape price trends across the Kingdom.