Saudi Arabia’s three major residential markets – Riyadh, Jeddah and Dammam – delivered contrasting performances in 2025, according to top real estate advisory and property consultancy, Cavendish Maxwell.

The port city of Jeddah emerged the top performer with its residential property sales setting a new annual record, with 30,500 transactions collectively worth SAR36.6 billion ($9.75 billion) in 2025.

Total sales values rose by almost 15.4% year-on-year, where the average transaction reached SAR1.2 million ($320,000), stated Cavendish Maxwell in its 2025 KSA Residential Real Estate performance report.

Dammam – the rapidly emerging property hotspot in KSA’s Eastern Province – secured sales worth SAR10.7 billion ($2.85 billion) across 9,500 transactions last year – an increase of almost 30% in values and 19% in volumes.

In Riyadh, buyers purchased 56,600 residential units in 2025, with a total sales value of SAR96.2 billion ($25.65 billion). While Riyadh’s average transaction value reached a new high of SAR1.7 million ($450,000), sales declined 31% compared to 2024.

Siraj Ahmed, Director, Head of Strategy & Consulting at Cavendish Maxwell, said: "KSA’s three major residential markets – Riyadh, Jeddah and Dammam – delivered contrasting performances in 2025. Jeddah showed resilience with its highest sales volumes for several years and is expected to maintain stable growth in the future. Dammam, where property is more affordable compared to other cities, was the standout performer and is poised for sustained growth supported by competitive pricing and robust economic activity in the region."

"In Riyadh, affordability constraints and elevated financing costs led to a decline in purchasing power and buyer activity. Although transactions were down year-on-year, population growth, urbanisation and housing initiatives should support long-term market demand," stated Ahmed. 

"We expect a recalibration of the market as new supply, the 5-year rent freeze and White Land Tax reforms make property more competitively priced and lead to a recovery in market activity," he added.

Ahmed

"External factors including oil market volatility and geopolitical tensions of course warrant close monitoring, but Saudi’s residential market remains well positioned, supported by strong demographic drivers, ongoing infrastructure investment and a continued commitment to Vision 2030," he added.

Inventory and future supply

Riyadh’s residential supply continued to expand last year, when 13,000 new units came to the market bringing the total inventory to 1.93 million. Around 63,000 homes are scheduled for completion in 2026 and 2027, but actual deliveries could be lower, as was the case in 2025.

“The expansion in supply is further supported by the recent rise in White Land Tax, which encourages landowners to develop empty plots of land and accelerate delivery timelines,” said Ahmed. “The full impact of this reform will likely materialise through this year and beyond, with the gap between demand and supply gradually narrowing, in turn easing price pressure and enhancing affordability.”

Jeddah’s residential property inventory is now just under 1.1 million, after the completion of 4,000 units last year. The city has a pipeline of 18,000 new units this year and another 22,000 in 2027, by which time total residential stock is projected to reach 1.14 million. However, as seen in Riyadh, actual completions may fall short of original forecasts.

Dammam delivered 500 units last year, bringing its total to 430,000. Around 15,000 new homes are expected by the end of 2027. The city’s residential sector is expected to become even more competitive, giving buyers more choice and better bargaining power.

Sales prices and rental rates

Property prices in Riyadh rose last year, with apartments reaching SAR6,245 (US$1,713) per square metre and villas SAR5,640 ($1,500), an increase of 6.6% and 9.7% respectively. There were similar hikes in the rental market, with apartments up just over 10% and villas 9.6%. The 5-year rent freeze, introduced last September to address affordability concerns, led to early signs of rent moderation in Q4.

In Jeddah, apartment prices increased by 1.2% to SAR4,385 ($1,170) per sqm, with villas up 3.2% to SAR5,185 ($1,382). The rental market saw a mixed performance: the average cost of leasing an apartment jumped 4.7%, while villa rents were down by 0.7%.

Over in Dammam, apartment prices rose 5.2% compared to 2024 with villas up 2.8%. Apartment rents were up 4.1% and villas 2.1%.-TradeArabia News Service