Authored by the expert who managed and guided the team behind the Saudi Arabia Property Pack
Yes, the analysis of Riyadh's property market is included in our pack
Property prices in Riyadh have risen sharply over the past year, making it a compelling yet challenging time to enter the market.
With apartments averaging SAR 5,200-6,175 per square meter and villas reaching SAR 13,500 per square meter in prime areas, the Riyadh real estate market is experiencing significant growth driven by Vision 2030 initiatives and infrastructure expansion.
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.
Riyadh's property market shows strong growth potential with 10.6% annual price increases for apartments and rental yields up to 12% in northern districts.
Vision 2030 projects and new foreign ownership laws create favorable conditions for both residents and investors.
| Key Metrics | Current Levels | Outlook |
|---|---|---|
| Apartment Prices | SAR 5,200-6,175/m² | 8-12% annual growth expected |
| Villa Prices | SAR 6,000-13,500/m² | Stable growth in prime areas |
| Rental Yields | 8-12% (North Riyadh) | Strong demand continues |
| Best Investment Areas | Al Olaya, Al Malqa, Hittin | Metro expansion benefits |
| Financing | 80-85% for locals, 65-75% expats | 4.5-5.5% mortgage rates |
| Foreign Ownership | New law coming 2026 | Increased market liquidity |
What are property prices in Riyadh right now, and how have they changed over the past 12 months?
As of September 2025, property prices in Riyadh have experienced substantial growth over the past year.
Apartments currently average SAR 5,200-6,175 per square meter in well-connected districts, representing a 10.6% year-on-year increase. Entry-level suburban apartments in Southern Riyadh start around SAR 3,000 per square meter, while prime central locations command higher prices.
Villa prices show even more dramatic variation, ranging from SAR 6,000 to SAR 13,500 per square meter in prime central areas. The luxury villa segment has experienced the fastest appreciation, with increases of 6-15% annually depending on location and amenities.
Land plots average SAR 2,216 per square meter, though this figure varies significantly by district and future development potential. The overall market momentum reflects strong demand driven by population growth, infrastructure development, and Vision 2030 initiatives.
It's something we develop in our Saudi Arabia property pack.
How are prices expected to move in the short term, medium term, and long term?
Price forecasts for Riyadh's property market show continued growth across all timeframes, with varying rates of appreciation.
In the short term (6-12 months), prices are expected to continue rising at 8-12% annually. This growth is supported by sustained demand, metro expansion projects, and population growth concentrated in central and northern districts. The momentum from current infrastructure projects will likely maintain upward pressure on prices through 2026.
Medium-term expectations (1-3 years) anticipate stable growth of 8-10% per year. Vision 2030 projects, new infrastructure developments, and government homeownership targets provide fundamental support for this sustained appreciation. The anticipated foreign ownership law implementation in 2026 may further boost demand.
Long-term projections (3-10 years) suggest ongoing urbanization and demographic expansion should support 4-8% annual appreciation. However, there's risk of growth plateauing if supply expansion outpaces demand growth by the middle of the decade, particularly as large-scale developments come online.
Which neighborhoods in Riyadh are currently the most in-demand, and which are undervalued?
The most in-demand neighborhoods in Riyadh are concentrated in the northern and central business districts.
Al Olaya leads demand as the central business district, offering proximity to major employers and commercial centers. Al Malqa, Hittin, Al Yasmin, and Al Narjis are experiencing rapid development with metro proximity and upscale amenities driving strong buyer interest.
Stable growth areas include Al Malaz, which despite being older offers reliable returns and affordable entry points. Jasmine, Kairouan, and Agate neighborhoods provide consistent appreciation with balanced supply and demand dynamics.
Undervalued opportunities exist primarily in South and East Riyadh, including Al-Aziziyah, Al-Shifa, Al-Dar Al-Baida, Al-Khuzama, and Al-Fursan. These areas currently trade at significantly lower prices but are experiencing infrastructure upgrades and development that could drive future appreciation.
The undervalued districts offer entry points for investors willing to accept longer investment horizons in exchange for potentially higher returns as development progresses.
How do property prices differ between apartments, villas, and land plots?
| Property Type | Average Price Range (SAR/m²) | Key Characteristics |
|---|---|---|
| Apartments - Entry Level | 3,000-4,000 | Suburban locations, basic amenities |
| Apartments - Mid-Range | 5,200-6,175 | Well-connected districts, good facilities |
| Apartments - Premium | 7,000-9,000 | Prime locations, luxury amenities |
| Villas - Standard | 6,000-8,000 | Suburban compounds, family areas |
| Villas - Premium | 9,500-13,500 | Prime central areas, luxury features |
| Land Plots | 2,216 (average) | Highly variable by district and zoning |
| Commercial Land | 3,000-8,000 | Business districts, development potential |
Don't lose money on your property in Riyadh
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What rental yields can you realistically expect in Riyadh today, broken down by area and property type?
Rental yields in Riyadh vary significantly by location and property type, with northern districts offering the highest returns.
North Riyadh delivers the strongest rental yields at 8-12%, particularly in Al Olaya, Al Malqa, Al Sahafa, and Al Yasmin. These areas benefit from high expatriate and professional demand, keeping vacancy rates below 10%.
West Riyadh shows excellent potential with yields up to 11.3% for one-bedroom apartments, driven by proximity to business districts and transportation links. Three-bedroom apartments typically generate 7-10% yields, with strong demand in family-oriented areas.
Villa and compound rentals generally produce more modest yields of 5-8%, though they offer stability and longer-term tenant relationships. Premium villas in established compounds can command higher rents but at lower yield percentages due to higher purchase prices.
South and East Riyadh areas often produce lower yields below 7%, but entry prices are more accessible for investors seeking capital appreciation over immediate income. The trade-off involves accepting lower current returns for potentially higher long-term gains as these areas develop.
How quickly are properties selling in different parts of Riyadh, and is there evidence of oversupply or shortage?
Property sales velocity varies significantly across Riyadh districts, with prime areas showing rapid turnover and emerging areas taking longer to clear inventory.
Prime and northern districts experience quick sales cycles, with quality properties often selling within weeks of listing. Vacancy rates remain below 10%, and high demand from expatriates and professionals maintains strong market liquidity in these areas.
Residential transaction volumes have shown some plateauing after sharp rises, with sales down 1.5% in Q2 2025. However, this reflects market normalization rather than weakness, as supply continues to struggle matching demand for quality housing.
Suburban and emerging areas present more balanced supply-demand dynamics, with longer time-on-market but improving conditions as infrastructure upgrades progress. Properties in these areas may take 2-4 months to sell depending on pricing and condition.
There's slight evidence of market plateauing, but no major oversupply concerns outside speculative land plots. The construction pipeline of 18,900 units under development could create supply pressure if demand softens, but current absorption rates remain healthy.
What government regulations, incentives, or taxes are affecting buyers and investors right now?
Government policies in Saudi Arabia strongly favor property market development and homeownership, creating multiple incentives for buyers and investors.
Vision 2030 serves as the major catalyst, driving infrastructure investment, homeownership programs, and overall demand growth. The initiative includes specific targets for increasing homeownership rates and urban development that directly benefit property values.
Foreign ownership legislation anticipated for 2026 represents a significant market catalyst, expected to boost liquidity and open new opportunities for international investors. This regulatory change could substantially increase demand and price appreciation.
The "White Land" tax imposes a 2.5% annual levy on undeveloped plots to encourage construction and reduce land speculation. This policy helps address supply shortages by incentivizing development over speculation.
Sakani and other government-backed programs provide down payment assistance and financing support for first-time buyers, expanding the potential buyer pool and supporting overall demand. Transaction taxes remain competitive compared to international standards.
How much financing is typically available from local banks, and what are the current mortgage rates?
Local bank financing in Riyadh offers substantial leverage opportunities, though terms vary significantly between Saudi nationals and expatriates.
Saudi nationals typically access financing up to 80-85% of property value, while expatriates generally qualify for 65-75% financing depending on income stability and credit history. Government employees and professionals at established companies often receive more favorable terms.
Current mortgage rates range from 4.5-5.5%, and these rates are expected to remain stable due to government interventions and Vision 2030 policy support. The relatively low rates compared to historical levels make leveraged property investment more attractive.
Approval processes move quickly for salaried professionals with established employment history, often completing within 2-4 weeks. Self-employed individuals and non-residents face slower approval processes and may require additional documentation or higher down payments.
It's something we develop in our Saudi Arabia property pack.
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.
What budget range makes the most sense for buyers aiming to live in the property versus those aiming to rent it out or resell?
Budget allocation strategies should align closely with investment objectives, whether for personal residence or investment returns.
Owner-occupiers benefit from budgets of SAR 1.2-2.2 million, which provides access to centrally located apartments or suburban villas with stable appreciation potential. This range offers good balance between location, amenities, and long-term value growth.
Investment-focused buyers should consider SAR 650,000-1.2 million for apartments in North and West Riyadh that generate strong rental yields. Higher-end investors might target SAR 2.5-4.5 million for upscale rental villas in Hittin or Al Malqa that command premium rents.
Resale-focused investors should examine emerging east and south districts where SAR 500,000-1 million provides entry into areas with significant infrastructure development planned. These locations offer lowest entry costs with highest potential future upside.
Budget flexibility allows investors to optimize between current income generation and future capital appreciation based on individual financial goals and risk tolerance.
What risks could affect property values in Riyadh in the coming years?
Several risk factors could impact Riyadh property values, though most appear manageable within the current economic framework.
Interest rate changes represent the most immediate risk, as rising rates could affect affordability and reduce demand from leveraged buyers. However, government policy appears committed to maintaining favorable lending conditions through Vision 2030 implementation.
Construction pipeline risks emerge from the 18,900 units currently under development, which could create supply pressure if demand softens or if projects complete simultaneously. Rapid new supply could cap growth if absorption rates decline.
Policy implementation risks center on the 2026 foreign ownership law changes, which may alter market dynamics and liquidity patterns. While likely positive overall, implementation details could create temporary market uncertainty.
Macroeconomic risks include oil price volatility affecting overall economic confidence, though Saudi Arabia's economic diversification efforts through Vision 2030 aim to reduce these dependencies. Speculative land pricing appears vulnerable to correction due to new taxes and enforcement measures.
If your goal is to live in Riyadh, which areas and property types currently provide the best balance of price, amenities, and future appreciation?
For residents prioritizing livability, certain neighborhoods offer optimal combinations of lifestyle amenities, reasonable pricing, and appreciation potential.
Al Olaya provides excellent urban living with central business district proximity, though at premium pricing. Al Malaz offers more affordable entry with stable neighborhoods and good connectivity, making it ideal for first-time buyers.
Al Narjis and Jasmine neighborhoods deliver balanced pricing with good amenities and appreciation prospects, particularly as infrastructure development continues. These areas provide family-friendly environments without excessive price premiums.
For family living, Hittin, Al Malqa, and Agate offer villa options with school access, larger homes, and green spaces. These locations provide suburban comfort while maintaining reasonable commute times to central business areas.
Entry-level districts like Al-Aziziyah, Al-Shifa, and Al-Murabba provide affordability with stable demand and improving connectivity as development expands. These areas suit buyers prioritizing value and long-term appreciation over immediate luxury.
If your goal is investing, which areas and property types offer the strongest returns and lowest risks right now?
Investment success in Riyadh requires matching property selection with return objectives and risk tolerance levels.
For highest rental yields, Al Olaya, Al Malqa, Al Sahafa, and Al Yasmin in North and West Riyadh deliver 8-12% returns with strong tenant demand. These areas offer lowest vacancy risk and most reliable cash flow generation.
Low-risk growth investments should focus on North business corridors and metro-adjacent areas where infrastructure development provides fundamental value support. Upscale villa compounds in established areas offer stability with steady appreciation.
Higher appreciation potential exists in suburban and developing districts like Al Narjis, Al-Khuzama, and Al-Fursan, where new infrastructure creates value uplift opportunities. These areas require longer investment horizons but offer superior capital gains potential.
Diversified investors might combine high-yield apartments in northern districts with appreciation-focused properties in developing areas, balancing current income with future capital growth across different market segments.
It's something we develop in our Saudi Arabia property pack.
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.
Riyadh's property market presents compelling opportunities for both residents and investors in late 2025, with strong fundamentals supporting continued growth.
Success requires careful area selection, appropriate financing, and alignment with personal investment objectives and risk tolerance.
Sources
- Gulf News - Saudi Arabia's home sales boom
- Arab News - Saudi real estate market analysis
- Sands of Wealth - Riyadh price forecasts
- Aawsat - Saudi real estate market performance
- Sands of Wealth - Average apartment rent Riyadh
- Sands of Wealth - Riyadh real estate forecasts
- AGBI - Saudi housing supply analysis
- Select Realty - Best neighborhoods Riyadh
- Madak - Top Riyadh neighborhoods 2025
- Sands of Wealth - Riyadh rent trends