Buying real estate in Saudi Arabia?

Will real estate prices in Jeddah keep going up in the future?

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Authored by the expert who managed and guided the team behind the Saudi Arabia Property Pack

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Jeddah's real estate market has been on a remarkable upward trajectory, with property prices climbing steadily over the past five years.

As we reach mid-2025, many potential buyers are wondering whether this growth will continue or if it's time to expect a slowdown. This comprehensive guide answers the most pressing questions about Jeddah's property market, helping you make an informed decision about whether to buy now or wait.

If you want to go deeper, you can check our pack of documents related to the real estate market in Saudi Arabia, based on reliable facts and data, not opinions or rumors.

How this content was created 🔎📝

At SandsOfWealth, we explore the Saudi Arabian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Riyadh, Jeddah, and Dammam. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What are property prices like in Jeddah right now?

As of June 2025, Jeddah's residential property market shows strong price levels across all segments.

Apartments in Jeddah currently average SAR 4,027 per square meter, representing a 5% increase from last year. Villas are priced around SAR 1.5 million on average, though luxury waterfront properties in premium districts like Al-Shati can command up to SAR 13 million.

The Jeddah property market offers significant variety - you can find mid-range apartments starting from SAR 300,000 in developing areas, while prime coastal properties reach SAR 20 million or more. Rental yields remain exceptionally attractive at 7.9-11.7% for 2-bedroom apartments, making Jeddah one of the highest-yielding markets in the Gulf region.

The market's diversity means there are opportunities for every budget level, from first-time buyers to luxury investors seeking premium waterfront properties.

It's something we develop in our Saudi Arabia property pack.

How have property prices in Jeddah changed over the past 1 to 5 years?

Jeddah's real estate market has experienced consistent growth over the past five years, with particularly strong acceleration since 2023.

Apartment values jumped 11.7% in 2021 alone - the fastest growth rate in at least five years. From 2023 to 2025, residential prices have increased by 5-6% annually, demonstrating sustained market strength.

The most dramatic change has been in transaction volumes, which surged 66.9% over the past year, even outpacing Riyadh. The total value of real estate transactions in Jeddah rose by 50% in the first half of 2024 alone.

Villas have been the star performers recently, with prices up 10.3% year-on-year in Q1 2025, compared to a more modest 1.2% gain for apartments. This differential reflects strong demand from wealthy Saudi families seeking larger homes and the limited supply of premium villa properties.

The consistent price appreciation across all property types indicates a healthy, sustainable market rather than speculative bubbles in specific segments.

What are the main reasons prices in Jeddah keep rising?

Several powerful factors are driving Jeddah property prices higher.

Population growth stands as a primary driver, with Jeddah's population approaching 5 million and continuing to grow by approximately 2.5% annually. This creates sustained demand for housing across all price segments, from affordable apartments to luxury villas.

Vision 2030 initiatives have transformed the market fundamentally. Government reforms allowing foreign property ownership, reducing mortgage down payments from 30% to just 5%, and investing billions in infrastructure projects like the Jeddah Central Project have created unprecedented opportunities for both buyers and investors.

Limited supply in prime coastal and central areas faces severe land constraints, pushing prices higher as demand outstrips available inventory. New developments haven't kept pace with buyer demand in many desirable neighborhoods, particularly in established districts like Al-Shati and Al-Hamra.

Economic diversification plays a crucial role, with Jeddah's evolution into a major commercial and tourism hub attracting both investors and new residents seeking opportunities. Mega-projects like King Abdullah Economic City continue drawing international attention and capital to the region.

Which Jeddah neighborhoods have seen the biggest price jumps?

Premium waterfront districts lead the market in price appreciation.

Al-Shati remains the crown jewel for luxury buyers, with properties reaching up to SAR 13 million and experiencing 12% annual growth. The area's exclusive waterfront location and premium apartment offerings continue attracting wealthy Saudi and international buyers.

Neighborhood Price Range Recent Growth Key Features
Al-Shati Up to SAR 13M +12% annually Luxury waterfront, premium apartments
Al-Hamra SAR 8,000/m² +10% annually Central location, 38% surge in transactions
Al-Marwah Mid-range +9% annually Urban expansion area, strong appreciation
Al-Salamah Varies +8% annually 11.7% rental yields, 43% increase in sales
North Obhur SAR 4-20M+ +11% annually Luxury villas, private communities

Al-Salamah has become an investor hotspot due to exceptional rental yields of 11.7%, while Al-Marwah offers the best value appreciation potential for middle-income buyers seeking growth opportunities.

Which property types - apartments, villas, or land - have increased the most?

Villas lead the market with a 10.3% year-on-year price increase in Q1 2025.

This strong performance stems from wealthy Saudi families seeking larger homes and limited supply in prime areas. Luxury villas in North Obhur and Al-Rawdah have seen particularly strong gains, with some properties appreciating by 15% or more annually.

Luxury apartments in waterfront locations have appreciated 5-8% annually, with branded residences and those with sea views commanding premium prices. Properties in Al-Shati and along the Corniche have attracted both local and international high-net-worth buyers seeking lock-and-leave convenience with spectacular views.

Mid-range apartments have grown 3-5% annually, benefiting from strong demand from young families and first-time buyers taking advantage of improved mortgage terms. This segment offers the highest transaction volumes and most liquid market conditions.

Land prices vary significantly by location, with coastal and central plots seeing double-digit annual increases due to scarcity, while peripheral areas offer more moderate appreciation but higher development potential.

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Are there government policies or economic trends that will keep pushing prices up?

Yes, several major policies and trends support continued price growth in Jeddah's property market.

Vision 2030 initiatives remain the cornerstone of market growth. Ongoing urban development, tourism expansion aiming for 100 million visitors annually, and economic diversification programs will sustain housing demand through 2030 and beyond.

Mortgage reforms continue transforming accessibility. The 5% down payment policy and expanded guarantee programs make homeownership achievable for thousands more Saudi families, maintaining strong buyer activity and market liquidity.

Foreign investment laws have opened new opportunities. Regulations allowing 100% foreign ownership in certain sectors and simplified visa procedures attract international capital and expatriate buyers, expanding the market beyond traditional local demand.

Infrastructure megaprojects create value appreciation catalysts. The Jeddah Metro under construction, Jeddah Central waterfront redevelopment, and expansion of King Abdullah Economic City will boost property values in connected areas significantly.

What risks could make Jeddah property prices drop or flatten soon?

While the outlook remains positive, several risks could slow or reverse price growth.

Affordability concerns are mounting as property prices rise faster than incomes, particularly for villas. The average Saudi family now needs 8-10 years of income to buy a home, up from 5-6 years previously, potentially limiting future buyer pools.

Oversupply threatens certain areas. Districts like Al-Basateen face potential oversupply with thousands of new units entering the market over the next 24 months, which could create localized price pressures and reduced rental yields.

Global economic factors pose external risks. Oil price volatility could affect government spending on infrastructure projects, while inflation pushing construction costs higher (housing costs up 8% in January 2025) may slow development. A potential global recession could impact foreign investment flows significantly.

Interest rate risks remain despite recent cuts. Any future increases could significantly impact mortgage affordability and buyer activity, particularly for first-time buyers relying on high loan-to-value mortgages.

It's something we develop in our Saudi Arabia property pack.

What do experts predict for Jeddah's property prices going forward?

Market experts and research firms paint an optimistic picture for Jeddah's real estate market.

Major consultancies project the Jeddah residential market will grow at a 7.9% compound annual growth rate (CAGR) from 2025 to 2030, supported by strong fundamentals and continued government backing. This projection suggests properties could appreciate by 40-50% over the next five years.

Knight Frank predicts moderate but steady price appreciation of 5-7% annually through 2027, with premium locations potentially seeing higher gains. Their analysis emphasizes the sustainability of growth rather than speculative bubbles.

JLL emphasizes that Vision 2030 initiatives will continue driving market growth, particularly in areas connected to new infrastructure projects. They highlight the multiplier effect of government investment on private sector confidence.

CBRE Saudi Arabia notes that Jeddah's market fundamentals remain stronger than most regional markets, with population growth, economic diversification, and infrastructure investment creating a sustainable growth trajectory through the end of the decade.

infographics rental yields citiesJeddah

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Saudi Arabia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Which areas in Jeddah will likely see the strongest price growth?

Several areas show exceptional growth potential based on current development plans and market dynamics.

Al-Shati and Al-Hamra will continue benefiting from waterfront redevelopment projects and remain top choices for luxury buyers seeking capital appreciation. These established premium areas offer scarcity value that drives consistent price growth.

Properties near planned Jeddah Metro stations represent outstanding opportunities. Areas within walking distance of metro stops typically see 15-25% appreciation once stations become operational, based on global precedents.

The Jeddah Central Project vicinity will experience transformation. This massive waterfront development will fundamentally alter nearby neighborhoods, creating new premium residential zones with exceptional growth potential.

North Jeddah emerges as a growth hotspot with expanding urban boundaries and new infrastructure making previously peripheral areas increasingly attractive. Early investors in these developing districts could see substantial returns.

It's something we develop in our Saudi Arabia property pack.

Which property types will perform best over the next few years?

Different property types offer varying opportunities for appreciation and returns.

Premium villas show the strongest potential for capital appreciation at 8-10% annually, driven by scarcity and wealthy buyer demand. These properties particularly excel in established neighborhoods with limited development potential.

Property Type Expected Annual Growth Best For Key Advantages
Premium Villas 8-10% Capital appreciation Scarcity, wealthy buyer demand
Waterfront Apartments 6-8% Luxury living Tourist appeal, limited supply
Mid-range 2-3 BR Apartments 5-7% Rental income High yields, strong tenant demand
Mixed-use Developments 7-9% Balanced returns Modern amenities, lifestyle appeal
Student Housing 6-8% Stable income Growing education sector

Properties in well-planned communities with comprehensive amenities, those near upcoming infrastructure projects, and units suitable for the growing young professional demographic will significantly outperform the broader market averages.

What should buyers know before purchasing property in Jeddah right now?

Foreign buyers must navigate specific legal requirements including obtaining permits from the Ministry of Interior.

Valid residence permits and minimum investment criteria apply to non-Saudi purchasers. Some areas remain restricted to Saudi nationals only, particularly near holy sites and certain coastal zones.

Due diligence proves essential for successful purchases. Buyers should research planned developments in target areas that could affect future values, verify clear title and absence of disputes, and understand service charges that can reach 2-3% annually for luxury properties.

Working with licensed agents familiar with local regulations prevents costly mistakes. Only authorized real estate brokers can legally facilitate transactions, and their expertise proves invaluable for navigating regulatory requirements.

Financial considerations extend beyond purchase price. Budget for the 5% minimum down payment plus transaction costs totaling 2-4% of purchase price. Factor in potential rental income, with yields of 7-12% realistic in many areas, and consider mortgage pre-approval to strengthen negotiating positions.

What are the potential benefits and risks of buying now versus waiting 3-5 years?

Buying now offers compelling advantages for long-term investors.

Locking in current prices becomes increasingly valuable with 7.9% projected annual growth. A SAR 1 million property today might cost SAR 1.4 million by 2030, representing SAR 400,000 in missed appreciation for those who wait.

Immediate rental income generation allows buyers to earn 7-12% yields starting immediately instead of paying rent while waiting. Over five years, this difference could equal 35-60% of the property's value in combined savings and income.

Current mortgage rates may not last indefinitely. The recent rate reductions have made borrowing more affordable, but future increases could significantly impact purchasing power and monthly payments.

However, risks exist for buyers entering the market now. Some analysts suggest certain luxury segments may be overvalued by 10-15%, creating potential for short-term corrections. Properties in districts with heavy construction could face 2-3 years of price stagnation as new supply enters the market.

The verdict favors action for buyers planning to hold properties for 5+ years. Well-researched purchases in established locations offer strong potential returns despite short-term volatility risks.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

  1. Sands of Wealth - Jeddah Real Estate Forecasts
  2. Global Property Guide - Saudi Arabia Price History
  3. Arab News - Business Economy Updates
  4. Knight Frank - Saudi Arabia Residential Market
  5. Crown Continental - Jeddah Real Estate Investment Guide 2025
  6. CBRE Saudi Arabia - Residential Market Report 2024
  7. JLL MENA - Jeddah Residential Market Analysis
  8. Deloitte Middle East - KSA Real Estate Predictions 2025