The Housing Market in Saudi Arabia is surging beyond 33bn US Dollars in H1 2025
The Saudi housing market continued to dominate the Kingdomโs real estate sector as residential transactions remained the driving force in H1 2025, comprising 63 % of total activity. The first half of 2025, as per Knight Frank Residential Market Overview, was characterized by a total transaction value of SR123.8bn (equivalent to 32.96bn dollars), which underscores the key role of this sector to the transformation of the Saudi Arabian economy.
Residential transactions alone achieved SR77.5bn (20.6bn), and almost 93,700 transactions, a growth of 7 % year on year. This increase was underpinned by a floating Saudi mortgage market, state-sponsored housing programs and new residential deliveries in big cities.
We divide the city-specific trends in Madinah real estate, Riyadh real estate, and Jeddah property trends as well as the long-term implications of Saudi Vision 2030 For real estate and the impending Saudi foreign ownership law below.
Madinahโs Real Estate Surge: Leading the Kingdomโs Growth
Madinah became the fastest residential market in the Kingdom in H1 2025. The city registered transaction values of SR3.4bn (906m) that was a 49 % year-on-year increase and the deal volume rose by 38 %.
- Prices of apartments increased by 2.5 % to SR3,835 (1,020) sqm.
- The decrease of 0.8 % in villa prices to SR3,500 (933 dollars) per sqm was a slight decrease.
The city has a driving force supported by massive city developments like the Rua Al Madinah project, which will see the introduction of new hotels, cultural attractions, and enhanced mass transportation. These investments are strengthening Madinah as a major real estate and tourism destination by improving the experience of residents and visitors.
Riyadhโs Market Rebalance: Prices Rise Amid Declining Transactions
H1 2025 The Riyadh real estate market went into a recalibration period following years of explosive growth. The number of transactions decreased 31-year on year and the value dropped by 20 % to SR29bn (7.71bn).
But this deceleration of action did not have any impact on the pricing - on the contrary, values kept rising:
- Apartments: The average apartment prices increased 10.6 % to SR6,175 (1,642) per sqm.
- Villas: The price of villas increased to 8.2 % to SR5,470 (1,456) per sqm.
- Northern Riyadh: The most expensive region in terms of villas at SR8,660 (2,306) per sqm.
- Metro Districts: Districts close to the new Riyadh Metro registered outstanding returns as Al Taawun increased 32 % to SR9,470 (2,518 dollars) per sqm.
This indicates a long-term demand in well connected and quality developments. As volumes were cooling, analysts consider it a natural market correction financed by Vision 2030 projects and infrastructure investment that will sustain Riyadh in the long run.
Jeddahโs Coastal Boom: Lifestyle Communities Drive Demand
Compared to the slowdown of Riyadh, Jeddah property trends were positive in H1 2025. The volume of transactions increased 19 and values grew 28 in the city to SR17.3bn (4.6bn).
- Apartments: The average apartment prices increased to SR4,324 (1150), taking a 2.7 % increase.
- Villas: The prices of villas rose 3.2 % to SR5,040 (1341 dollars) per sqm.
The demand is being driven by a master-planned community such as Al-Arous by Roshn, which provides an integrated urban lifestyle and living amenities in coastal areas. As tourism and hospitality continue to grow as well, Jeddah is becoming increasingly a destination to both end-users and investors that are interested in long-term capital growth.
Vision 2030 Impact: Fueling Saudi Arabiaโs Housing Market
The housing market boom is still anchored on the Saudi Vision 2030 For real estate. The major government goals, including the attainment of 70 % home ownership by 2030, have hastened mortgage reform and triggered large-scale residential deliveries.
Masar Destination and UA Madinah, are part of the urban regeneration models in Makkah and Madinah, respectively, incorporating modern residential, commercial, and cultural space, based on the objectives of tourism development.
At the same time, Riyadh is still appealing to investment thanks to its conversion into an international center, which can be supported by infrastructure megaprojects, such as Riyadh Metro and the King Salman Park.
Foreign Ownership Law: A Game-Changer for 2026
The Saudi foreign ownership law approval is one of the greatest changes that the Saudi housing industry is expected to see in the future, as it will become effective in January 2026.
This framework will enable non-Saudis to have a higher access to property ownership, which will likely to:
- Market Liquidity: Deepen market liquidity.
- International Investors: Attract international investors.
- Project Growth: Improve the quality and the magnitude of real estate projects in the future.
According to industry observers, the law will transform the industry and specifically the markets in Riyadh, Jeddah, and Madinah as the demand by the expatriates and foreign investors will most probably pick pace.
