As Saudi Arabia prepares for a significant shift in its real estate landscape, the foreign ownership law set to be enacted in January 2026 is poised to transform the market. This legislative change is expected to enhance foreign investment in the Kingdom’s real estate sector, attracting international developers and reshaping residential dynamics. The evolving landscape underscores Saudi Arabia’s commitment to economic diversification and urban development, as outlined in Vision 2030.
Current Trends in the Saudi Real Estate Market
Saudi Arabia’s residential real estate market is increasingly maturing. According to the latest JLL KSA Living Market Dynamics report for Q2 2025, urban centers throughout the Kingdom have recorded notable increases in rental rates and diverse transactional activity. These developments are largely influenced by the Vision 2030 urban initiatives, an expanding population, economic diversification efforts, and government programs aimed at promoting home ownership.
The ongoing shift toward affordable apartment living and master-planned communities underscores a growing consumer preference for integrated lifestyles, further fueling demand for housing options that cater to modern urban residents.
The Impact of the Foreign Ownership Law
Saud Al Sulaimani, Country Lead and Head of Capital Markets at JLL Saudi Arabia, commented on the maturation of the Saudi Arabian residential market, noting, “The Saudi Arabian residential market is maturing, reflecting a dynamic landscape driven by the Kingdom’s broader objectives to meet end-user needs.”
He further explained, “While ongoing government initiatives have led to strong underlying demand, the sector is poised for further evolution and diversification, catalyzed by the upcoming foreign ownership law to be implemented in January 2026.” This legislation is anticipated to invigorate the market, enhancing real estate supply and attracting international developers to the Saudi market, thereby broadening opportunities for all stakeholders.
Regional Performance and Market Activity
Riyadh is showing robust growth as of Q2 2025, with villa prices appreciating by 15.1 percent year-on-year and apartment prices increasing by 13.3 percent. Villa rents climbed 13.9 percent, while apartment rents rose 6.9 percent. Conversely, in Jeddah, market performance has been more mixed, with villa prices up 4.4 percent but apartment prices experiencing a decline of 3 percent.
In the Dammam Metropolitan Area (DMA), demand remains strong for high-end waterfront properties, with Al Khobar seeing apartment prices rise by 5.8 percent and villa prices by 2.2 percent. Dammam’s apartment prices remained stable, while villa prices increased by 1.8 percent.
Transactional activity across regions indicates a divergence in performance: Riyadh recorded 2,758 transactions, a decrease of 1.5 percent year-on-year; Jeddah saw a notable surge of 46.1 percent, with 1,100 transactions; and Al Khobar experienced a 23.7 percent increase, while Dammam’s transactions declined by 6.7 percent.
Future Outlook and Supply Dynamics
Looking ahead, the supply dynamics in the Saudi real estate sector appear optimistic. In Riyadh, the residential stock reached 2.17 million units in the first half of 2025, with 5,600 new units delivered and an additional 18,900 expected by year-end. Jeddah’s stock rose to 1.23 million units, with 8,640 more underway for delivery this year.
In the DMA, existing supply is focused on coastal areas, with future developments anticipated to expand inland and southward. Notably, new supply in Riyadh and Jeddah increasingly emphasizes master-planned communities, as developers prioritize modern amenities, such as gyms and parking facilities, to meet the evolving needs of urban residents.
This transitional phase within Saudi Arabia’s real estate sector is a response to the interplay of affordability, lifestyle changes, and the increasing appetite from investors, all of which set the stage for continued growth under the Vision 2030 initiative.