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Saudi Arabia's property market is experiencing robust growth in 2025, with prices climbing steadily across most regions.
The residential sector continues to drive the market forward, showing a 5.1% year-on-year increase in Q1 2025, while major cities like Riyadh witness even more dramatic surges of over 10%.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.
Property prices in Saudi Arabia are definitely going up, with the residential sector growing by 5.1% year-on-year in Q1 2025, led by Riyadh's impressive 10.7% increase. The market is supported by strong fundamentals including Vision 2030 projects, population growth, and government homeownership initiatives, with experts projecting continued growth through 2030.
| Metric | Current Status | Trend |
|---|---|---|
| Overall Real Estate Price Growth | +4.3% YoY (Q1 2025) | Rising |
| Residential Property Growth | +5.1% YoY (Q1 2025) | Accelerating |
| Riyadh Property Prices | +10.7% YoY | Leading Growth |
| Transaction Volume | +37% YoY | Record Highs |
| Market Size Projection | $42B (2024) → $66B (2030) | 7.91% CAGR |
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.
How much have residential property prices increased in Saudi Arabia in Q1 2025?
Residential property prices in Saudi Arabia rose by 5.1% year-on-year in Q1 2025, marking an acceleration from the 3.6% annual growth recorded in Q4 2024.
This surge in residential prices significantly outpaced the overall real estate market, which saw a 4.3% increase during the same period. The residential segment continues to be the primary driver of Saudi Arabia's property market growth, reflecting strong demand from both local buyers and expatriates seeking housing in the Kingdom's major urban centers.
Transaction volumes have surged even more dramatically than prices, with Q1 2025 recording a 37% year-on-year increase in property transactions. The total value of real estate transactions reached SAR 2.5 trillion ($533 billion) in 2024, with over 622,000 deals covering approximately 5.8 billion square meters.
The robust performance reflects the impact of Vision 2030 initiatives and government policies aimed at boosting homeownership to 70% by 2030.
This growth trajectory shows no signs of slowing, with market fundamentals remaining strong as Saudi Arabia continues its economic diversification efforts.
Which Saudi cities saw the highest property price increases in early 2025?
Riyadh leads all Saudi cities with a remarkable 10.7% year-on-year price increase in Q1 2025, making it the hottest property market in the Kingdom.
The capital's exceptional growth significantly outpaces other major cities, driven by its status as the economic hub and the concentration of Vision 2030 mega-projects. Following Riyadh, the Northern Region recorded an 8.7% increase, while Al-Jouf saw prices rise by 8.2%. Jeddah, the Kingdom's second-largest city, experienced a more moderate but still healthy 5.0% growth.
In contrast, some regions experienced price declines during the same period. Mecca saw prices drop by 2.1%, Jazan declined by 1.8%, and Al Qaseem decreased by 0.5%. The Eastern Province, home to the oil industry, recorded a modest 3.2% increase.
These regional variations reflect the concentration of economic activity and infrastructure investments in major urban centers, particularly Riyadh, which continues to attract significant domestic and foreign investment.
The disparity in price growth across regions underscores the importance of location in Saudi Arabia's evolving property market.
What are the current average property prices per square meter as of mid-2025?
As of June 2025, average residential property prices per square meter in Riyadh have reached SAR 4,971 for apartments and SAR 5,824 for villas.
In Jeddah, villa prices average SAR 5,707 per square meter, while apartments are estimated at SAR 4,200-4,500 per square meter. Luxury villas in premium areas of Riyadh command significantly higher prices, ranging from SAR 7,500 to 10,000 per square meter, reflecting the strong demand from high-net-worth individuals and expatriates under the Premium Residency program.
The northern districts of Riyadh command the highest prices due to their proximity to major infrastructure projects and business districts. Premium neighborhoods in both Riyadh and Jeddah have seen prices rise by up to 10% annually, particularly for luxury villas and high-end apartments.
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These price levels represent significant appreciation from just a year ago, with the luxury segment experiencing the most dramatic increases.
Which property types experienced the biggest price surge in 2024-2025?
Villas emerged as the clear winner in terms of price appreciation, with national prices rising 6.5% year-on-year in Q4 2024.
In Riyadh, the luxury villa segment saw even more dramatic increases of 12-15% in Q1 2025, driven largely by demand from Premium Residency holders. Apartments followed with a 2.9% national increase, though Riyadh apartments performed much better with 8.4% growth. Residential land prices rose by 2.5% nationally, while townhouses increased by 3.8%.
| Property Type | National Growth (Q4 2024) | Riyadh Growth (Q1 2025) | Key Driver |
|---|---|---|---|
| Luxury Villas | +6.5% | +12-15% | Premium Residency demand |
| Apartments | +2.9% | +8.4% | Urban migration |
| Residential Land | +2.5% | +5-7% | Development potential |
| Townhouses | +3.8% | +6-9% | Middle-market strength |
The luxury segment's outperformance reflects the success of government initiatives to attract high-net-worth expatriates and the concentration of wealth in major urban centers.
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How is the new Real Estate Transaction Tax affecting property prices in 2025?
The Real Estate Transaction Tax (RETT), implemented in April 2025, imposes a flat 5% tax on all property transactions but has shown minimal impact on market momentum.
Initial market reaction saw transaction volumes dip by 8-10% in April 2025 as buyers and sellers adjusted to the new tax regime. However, by June 2025, activity had rebounded to pre-tax levels, demonstrating the market's resilience and underlying strength. Sellers have largely absorbed the tax burden rather than passing it on to buyers, helping maintain price growth momentum.
The tax has improved market transparency by formalizing many previously informal transactions, contributing to better market data and oversight. Early estimates suggest the government will collect SAR 2-3 billion in additional annual revenue from RETT.
Market participants have quickly adapted to factor the tax into their negotiations, with both buyers and sellers adjusting their expectations accordingly.
The successful implementation of RETT without significant market disruption reinforces confidence in Saudi Arabia's property sector.
What are the latest forecasts for Saudi property prices through 2026?
Industry experts project continued robust growth for Saudi Arabia's residential property market, with national prices expected to rise 6-8% in 2025 and 5-7% in 2026.
The market size is forecast to grow from $42 billion in 2024 to $66 billion by 2030, representing a compound annual growth rate (CAGR) of 7.91%. Riyadh is expected to lead with 8-10% annual growth through 2026, driven by EXPO 2030 preparations and continued Vision 2030 investments.
Jeddah is projected to see steady 4-6% annual growth, while the NEOM region could experience speculative growth of 15-20% as development accelerates. Dammam is expected to grow 3-5% annually due to industrial expansion, while secondary cities may see slower but stable growth of 2-4%.
These forecasts assume continued government support, stable oil prices above $70 per barrel, and successful execution of Vision 2030 projects.
It's something we develop in our Saudi Arabia property pack.
Which neighborhoods in Riyadh and Jeddah saw the fastest price growth in 2025?
North Riyadh leads all districts with exceptional price growth of 15-18% in Q1 2025, driven by proximity to the King Abdullah Financial District.
Al Nakheel follows closely with 12-14% growth, benefiting from new metro station connections, while Al Sahafa recorded 11-13% increases due to premium residential developments. Al Malaz saw 10-12% growth from urban renewal projects, and Al Olaya experienced 9-11% appreciation as the business district continues to expand.
| Riyadh Neighborhood | Price Growth | Average Price/m² | Key Growth Driver |
|---|---|---|---|
| North Riyadh | +15-18% | SAR 6,500-8,000 | Financial District proximity |
| Al Nakheel | +12-14% | SAR 5,500-6,500 | Metro connectivity |
| Al Sahafa | +11-13% | SAR 5,000-6,000 | Premium developments |
| Al Malaz | +10-12% | SAR 4,500-5,500 | Urban renewal |
In Jeddah, North Jeddah leads with 7-9% growth due to new waterfront developments, while Al Shatea's coastal premium properties saw 8-10% increases.
These neighborhood-specific trends highlight the importance of infrastructure development and location in driving property values.
How do current Saudi property prices compare to 5 years ago?
Saudi residential property prices have increased by approximately 28-32% cumulatively since 2020, representing a significant appreciation over the five-year period.
Riyadh apartments have surged 35-40% from around SAR 3,550 per square meter in 2020 to SAR 4,971 in 2025. Villas in the capital have performed even better, rising 42-48% from approximately SAR 4,000 to SAR 5,824 per square meter. Jeddah properties have seen more moderate but still substantial increases of 20-25% on average.
The market's journey included a strong post-pandemic recovery of 8.5% in 2021, accelerated growth of 12.3% in 2022 driven by Vision 2030 momentum, a correction in 2023 with transaction values declining 16%, and a strong rebound in 2024 with 15% transaction value growth.
The compound annual growth rate of 5-7% has significantly outpaced inflation, making real estate one of the best-performing asset classes in Saudi Arabia.
This sustained appreciation reflects the fundamental transformation of Saudi Arabia's economy and the success of government initiatives to develop the property sector.
We made this infographic to show you how property prices in Saudi Arabia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It's an easy way to spot where you might get the best value for your money. We hope you like it.
What impact will EXPO 2030 have on Riyadh property prices?
EXPO 2030 in Riyadh is already catalyzing significant property market activity, with areas near the future EXPO site commanding 15-20% premium pricing as of June 2025.
Properties within a 5-kilometer radius of the EXPO site are experiencing the most dramatic appreciation, while metro-connected areas along transport corridors are seeing 10-12% price increases. Mixed-use developments in designated hospitality zones have risen 8-10%, and the entire northern Riyadh district is expected to appreciate 12-15% by 2026.
The government has committed SAR 75 billion in infrastructure investments, including SAR 30 billion for transport upgrades, SAR 15 billion for hospitality development, SAR 20 billion for urban beautification, and SAR 10 billion for technology infrastructure. Short-term rental rates are projected to triple during the EXPO period.
Property investors are positioning for an "EXPO effect" similar to Dubai 2020, with prices expected to peak in 2029-2030.
The long-term legacy of improved infrastructure and international visibility is expected to sustain property values well beyond the event.
Are there signs of a property bubble forming in Saudi Arabia as of mid-2025?
While property prices are rising rapidly, current indicators suggest controlled growth rather than a dangerous bubble forming in Saudi Arabia's market.
The price-to-income ratio in Riyadh stands at 7.2x, which is moderate-to-high but not at bubble levels seen in other global cities. Mortgage default rates remain low at 1.8%, indicating healthy lending practices and borrower capacity. Speculative buying accounts for only 15-20% of transactions, suggesting genuine end-user demand drives most purchases.
A critical factor preventing bubble formation is the structural shortage of 250,000 housing units, creating genuine supply-demand imbalance. The government actively monitors the market and has signaled readiness to intervene if overheating accelerates, with potential measures including transaction limits or cooling-off periods.
Conservative lending practices with a 70% loan-to-value maximum, combined with genuine economic diversification driving growth, provide additional safeguards.
The market appears to be experiencing sustainable growth supported by real fundamentals rather than speculative excess.
How are rising construction costs affecting property prices in 2025?
Construction costs in Saudi Arabia are rising at 5-7% annually in 2025, among the fastest rates globally, directly impacting property prices.
Labor costs have surged 8-10% due to skilled worker shortages, while material costs increased 6-8% from global supply chain disruptions. Equipment costs rose 4-6% due to import dependencies, and land prices in prime urban locations jumped 10-15%. New regulatory compliance requirements added another 3-5% to overall costs.
Developers report that 70-80% of these cost increases are being passed to buyers in new developments, adding approximately SAR 300-500 per square meter to final prices. This contributes roughly 2-3% to annual property price inflation. Existing properties benefit from replacement cost appreciation, making them increasingly attractive relative to new construction.
It's something we develop in our Saudi Arabia property pack.
The government's affordable housing programs include subsidies that help limit the impact on lower-income buyers, while the luxury segment experiences full cost pass-through plus premium margins.
What are the current mortgage rates and lending conditions in June 2025?
Saudi Arabia's mortgage market remains highly supportive with competitive rates, as Saudi citizens can access subsidized loans at 3.5-4.5% interest with up to 90% loan-to-value ratios.
Commercial mortgage rates for Saudi citizens range from 4.5-6.0% with up to 85% LTV and typical 20-year terms. Expatriate employees face slightly higher rates of 5.5-7.0% with maximum 70% LTV and 15-year terms, while Premium Residents enjoy better conditions at 5.0-6.5% with up to 75% LTV and 20-year availability.
Islamic financing options remain popular at 4.0-5.5% rates with Sharia-compliant terms. The Saudi Central Bank (SAMA) has maintained supportive rates despite global pressures, with bank lending to real estate up 22% year-on-year. The average mortgage size has increased to SAR 650,000 from SAR 520,000 in 2024.
Approval rates stand at 78% for citizens and 65% for expatriates, with processing times reduced to just 7-10 days from the previous 15-20 days.
This favorable lending environment continues to fuel demand and support property price growth across the Kingdom.
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.
Property prices in Saudi Arabia are definitively rising, with the residential sector leading growth at 5.1% year-on-year in Q1 2025 and Riyadh surging by 10.7%.
The market's strong fundamentals, including Vision 2030 projects, population growth reaching 40 million by 2030, government homeownership initiatives targeting 70% ownership, and the upcoming EXPO 2030, indicate this upward trend will continue through 2026 and beyond, making Saudi Arabia's property market one of the most dynamic in the Middle East region.
Sources
- Global Property Guide - Saudi Arabia Price History
- Arab News - Saudi Real Estate Prices Update Q1 2025
- Sands of Wealth - Saudi Arabia Real Estate Forecasts
- Trading Economics - Saudi Arabia Housing Index
- S&P Global - Saudi Residential Real Estate Market Analysis
- Globe Newswire - Saudi Residential Market Forecast 2030
- Arab News - Saudi Real Estate Index Q4 2024
- Fingerlakes1 - Saudi Property Price Analysis
- Statista - Saudi Arabia Real Estate Market Forecast
- Mordor Intelligence - Saudi Real Estate Market Overview
- Trading Economics - Saudi House Price Index YoY