The Saudi property market is not just evolving, it's shifting gears. With Riyadh's residential real estate sales hitting an eye-popping SR17.6 billion ($4.69 billion) in the third quarter of 2025, the capital is gearing up to deliver 57,000 new homes over the next couple of years. That's a big number. But why such a boom? And who's buying?

Between July and September, Riyadh saw 13,000 residential transactions—a significant jump of nearly 19% from the previous quarter. It's not just about what's been sold; 10,000 new units have already been delivered this year, with another 6,000 expected before the year ends.

The Dammam Boom

But Riyadh isn't the only city making waves. Dammam is having its moment. For the first time making it into Cavendish Maxwell’s latest KSA report, Dammam's residential sales have skyrocketed to unprecedented heights. In Q3 2025, transactions hit 3,000, marking a year-on-year increase of nearly 60% and a quarter-on-quarter rise of 37%, with sales values climbing to SR3.2 billion ($850 million). These are not small numbers.

Jeddah: The Steady Player

Jeddah's not sitting idle either. The city recorded a 10% rise in transactions, totaling 7,500, and a 9% increase in sales values, reaching SR8.7 billion ($2.31 billion). Yet, despite these quarterly gains, both Riyadh and Jeddah have suffered year-on-year declines due to affordability pressures. Sales dropped 44% in Riyadh and 19% in Jeddah. Ouch.

Sean Heckford from Built Asset Consulting says Riyadh’s rapid price hikes in 2024 led to soaring sales and rental prices, forcing the government to slap on a five-year rent freeze to tackle affordability issues. Jeddah's prices have steadied, easing affordability pressures a bit. Meanwhile, Dammam's affordability has turned it into an investment hotspot, attracting both end-users and investors.

Market Movements and Predictions

Cavendish Maxwell's deep dive into the data shows Q3 sales prices for apartments and villas rose across the board, with Riyadh leading the charge. Riyadh saw apartment prices hit SR6,160 ($1,642) per square meter, a 7.5% annual increase. Villa prices also climbed to SR5,500 ($1,466) per square meter, up 10.1% year-on-year.

In Jeddah, apartment prices ticked up 1.6% to SR4,360 ($1,162) per square meter, and villa prices rose 3.1% to SR5,140 ($1,370). Dammam saw apartment prices grow 5.8% annually, with villa prices increasing by 3.2%.

Rental Realities

Riyadh isn't just leading in sales. It's also experiencing the sharpest rise in rentals. Apartment rents jumped 11.8% year-on-year, and villas saw a 10.7% increase. Jeddah's apartment rents rose 5.6%, though villa rents dipped slightly by 2.1%. In Dammam, apartment rents increased by 4.8%, and villa rents went up 2.2%.

Altogether, the three cities delivered 13,500 new homes in the first nine months of 2025. By the end of the year, Riyadh will have added 16,000 homes, Jeddah 5,000, and Dammam 1,800. Looking ahead, Riyadh has 57,000 homes lined up for 2026 and 2027, with Jeddah and Dammam planning 36,000 and 12,000, respectively.

Regulatory Shifts and the Road Ahead

New laws and tax reforms are set to further shake up the market dynamics from 2026. The foreign ownership law, effective January 2026, is expected to boost buyer activity. Meanwhile, the new White Land Tax encourages landowners to sell or develop their plots. Cavendish Maxwell notes that although the rent freeze will improve affordability in Riyadh, it might also reduce landlords' incentives to maintain properties or invest in new stock short-term.

Heckford adds that Saudi Arabia’s Q3 residential market performance is a reflection of a transitional phase marked by strong macroeconomic fundamentals and evolving regulatory measures. Despite challenges, such as affordability in Riyadh, demand remains strong, supported by new laws and tax systems. Jeddah is stable, and Dammam is emerging as a growth hotspot.

With Vision 2030 initiatives and infrastructure investments in play, Saudi Arabia's real estate market is set to continue its upward trajectory, promising new opportunities for investors and residents alike.