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Thinking about buying a 3-bedroom apartment in Riyadh's Al Olaya district? It’s a vibrant area, but you're probably wondering: is now the right time to buy, or should you wait for prices to drop?
And what about long-term investment—should you look into other neighborhoods like Al Malaz or Al Murabba where property values might appreciate more over time?
In this article, we’ll answer these questions. We know this market quite well - and we have put all our knowledge in the Saudi Arabia Property Pack.
Will property prices increase in Saudi Arabia in 2025?
Yes, property prices in Saudi Arabia are expected to rise in 2025, driven by a combination of economic growth and government initiatives aimed at boosting the real estate sector.
Backed by our fresh, in-depth market analysis, we’re confident that Saudi Arabia remains an attractive market for both domestic and international investors.
While there are challenges such as global economic uncertainties, the main drivers behind Saudi Arabia’s property price growth are strong and persistent.
The Vision 2030 initiative and ongoing infrastructure projects continue to enhance the appeal of the real estate market, attracting both local and foreign investments.
Signals pointing to a property price increase in Saudi Arabia
Here are some factors suggesting prices could increase:
The Saudi government's Vision 2030 initiative is driving significant economic diversification and urban development, which is expected to boost demand for residential and commercial properties.
Major infrastructure projects, such as the development of NEOM and the Red Sea Project, are likely to increase the attractiveness of surrounding areas, leading to higher property values.
The introduction of new mortgage laws and financial products is making it easier for citizens to purchase homes, thereby increasing demand in the housing market.
The growing population and urbanization trends in cities like Riyadh and Jeddah are expected to sustain high demand for housing, pushing prices upward.
Foreign investment in the Saudi real estate market is on the rise, driven by relaxed regulations and increased transparency, which is likely to contribute to price increases.
The expansion of the tourism sector, particularly with the opening of new tourist attractions and facilities, is expected to drive demand for hospitality and residential properties.
Government incentives for real estate developers to build affordable housing are expected to stimulate the market, leading to increased activity and potentially higher prices.
Signals pointing to a property price decrease in Saudi Arabia
Here are some factors suggesting prices could fall:
Global economic uncertainties, including potential recessions in major economies, could impact investor confidence and slow down property market growth.
Rising construction costs due to inflation and supply chain disruptions could lead to delays in new developments, affecting the supply-demand balance.
Potential increases in interest rates could make borrowing more expensive, reducing the purchasing power of potential homebuyers and cooling demand.
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If property prices go up in Saudi Arabia, how much would they increase by?
If real estate prices in Saudi Arabia were to rise in 2025, the increase would likely be around 3% to 7% of their 2024 values.
Typically, real estate in emerging markets like Saudi Arabia appreciates by approximately 3% to 7% annually over the long term. However, fluctuations can occur depending on factors such as region, season, and property type.
It means that, if you spot a lovely 2-bedroom apartment in Riyadh for 1,000,000 SAR today, don't be surprised if it's priced between 1,030,000 and 1,070,000 SAR this time next year.
To give you a better understanding, here is a table that shows 7 types of Saudi real estate properties, their estimated prices in 2024, and projections for 2025 based on potential price increases of 3%, 5%, and 7%.
| Type of Property | Average Price in 2024 (SAR) | Price in 2025 (3% increase) | Price in 2025 (5% increase) | Price in 2025 (7% increase) |
|---|---|---|---|---|
| Apartment (60 sqm / 646 sqft) | 1,000,000 SAR | 1,030,000 SAR | 1,050,000 SAR | 1,070,000 SAR |
| Villa (200 sqm / 2,153 sqft) | 3,500,000 SAR | 3,605,000 SAR | 3,675,000 SAR | 3,745,000 SAR |
| Luxury Penthouse (150 sqm / 1,615 sqft) | 5,000,000 SAR | 5,150,000 SAR | 5,250,000 SAR | 5,350,000 SAR |
| Studio (40 sqm / 431 sqft) | 600,000 SAR | 618,000 SAR | 630,000 SAR | 642,000 SAR |
| Loft (100 sqm / 1,076 sqft) | 2,000,000 SAR | 2,060,000 SAR | 2,100,000 SAR | 2,140,000 SAR |
| Townhouse (120 sqm / 1,292 sqft) | 2,500,000 SAR | 2,575,000 SAR | 2,625,000 SAR | 2,675,000 SAR |
| Investment Property (70 sqm / 753 sqft) | 1,200,000 SAR | 1,236,000 SAR | 1,260,000 SAR | 1,284,000 SAR |
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If real estate prices go up in Saudi Arabia, which areas are likely to see the biggest increases?
Today, people who want to move to Saudi Arabia are looking for a blend of traditional charm and modern conveniences, which Riyadh's Diplomatic Quarter delivers. Hence, we could see a price increase there in 2025.
Also, lately, there's been a shift toward more youthful, vibrant neighborhoods, and Al Khobar's Corniche has really taken off.
We like it when information is clear and easy to digest. So, here’s a table that highlights the areas where prices might rise the most, along with the reasons behind those expected increases. It’s very high-level. If you want more details on a specific area, please check our real estate pack tailored to the Saudi market.
| Neighborhood | Level of Increase | Why |
|---|---|---|
| Riyadh's Diplomatic Quarter | High | Recent development of luxury housing projects and its increasing appeal to international residents and diplomats, driving demand. |
| Jeddah's Al Hamra District | High | Expected rise due to limited housing stock, upcoming renovations to heritage buildings, and growing demand for prime properties in central Jeddah. |
| Al Khobar's Corniche | Medium-High | Ongoing gentrification and new transport links, along with several planned redevelopment projects in the area, are likely to push prices higher. |
| King Abdullah Economic City | Medium | The shift towards hybrid workspaces is driving demand for residential properties near business districts, combined with new mixed-use developments. |
| Riyadh's Al Olaya District | Medium-High | Eco-friendly urban projects and recent construction of new schools and parks are increasing its attractiveness for families, pushing prices upward. |
| Jeddah's Al Balad | Medium | Investment in local infrastructure, such as the extension of tram lines and renovation of historic areas, is boosting long-term value. |
| Riyadh's Al Malqa | Medium-High | With new cultural and commercial spaces being developed, this trendy neighborhood is seeing increased demand from both residents and investors. |
| Jeddah's Al Shati | High | Upcoming large-scale urban regeneration projects and improved public transport access are expected to make this area more desirable. |
| Dammam's Al Faisaliyah | Medium-High | Its proximity to major business hubs, along with new office and residential developments, makes it increasingly attractive to professionals seeking more space. |
| Riyadh's Al Nakheel | Medium | Gentrification and cultural regeneration projects are attracting new residents, leading to rising prices as the area becomes more fashionable. |
| Jeddah's Al Rawdah | High | As new luxury developments are launched, demand for premium housing among wealthy buyers is expected to further increase property values. |
| Riyadh's Al Murabba | High | Upcoming restoration of historic sites and high-profile cultural projects are driving a renewed focus on this central, historic location. |
If I'm looking to invest in real estate, what types of properties should I focus on for the best value appreciation in Saudi Arabia?
In 2025, Saudi Arabia's real estate trends focus on tech-smart, energy-efficient apartments, larger suburban homes for families, properties with outdoor spaces, and eco-friendly buildings—all driving higher demand and prices. Here is a summary.
- Tech-Equipped and Energy-Efficient Apartments:
Driven by remote work and sustainability trends, these homes offer smart technology features and energy-saving systems. They cater to young professionals and tech workers, making them a hot commodity in 2025, especially in cities like Riyadh and Jeddah.
- Family-Sized Villas in Suburban Areas:
With a growing demand for larger living spaces, especially among families, suburban areas near major cities like Riyadh and Dammam are seeing increased interest. Proximity to green spaces, schools, and community amenities is a major factor driving value.
- Properties with Outdoor Spaces:
Post-pandemic, outdoor spaces like terraces, balconies, or gardens have become highly desirable. In urban areas of Saudi Arabia, these features offer a much-needed escape and are likely to drive up property values.
- Eco-Friendly Buildings with Low Carbon Footprints:
Saudi Arabia's Vision 2030 initiative emphasizes sustainability, boosting demand for eco-certified buildings. Buyers are increasingly valuing properties that align with the country's green goals, leading to price appreciation in this category.
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