Residential sales in Riyadh surged to SAR 17.6 billion ($4.69 billion) during the third quarter of 2025, signaling a vibrant housing market in the Saudi capital. With 57,000 new homes set to be delivered in the coming two years, the demand for housing continues to rise, reflecting both regional growth and ongoing investment in the real estate sector.
According to a recent report by real estate advisory firm Cavendish Maxwell, Riyadh recorded approximately 13,000 residential transactions between July and September, marking a substantial increase of nearly 19 percent compared to the previous quarter.
In the first nine months of 2025, the city successfully delivered about 10,000 new homes, with an additional 6,000 units anticipated to be completed by the end of the fourth quarter. These developments contribute significantly to the rising residential sales figures in Riyadh, highlighting ongoing efforts to meet housing demand.
However, it’s noteworthy that despite the substantial quarterly increase, annual sales in Riyadh saw a decline of 44 percent year-on-year. This drop in activity underscores the affordability challenges driven by rapid price escalation that occurred last year, demonstrating the complexities of the market dynamics.
Dammam Outperforms, Jeddah Shows Stability
Dammam has emerged as a standout performer in the Kingdom’s residential market, experiencing its highest transaction volumes in recent years. The Eastern Province city recorded around 3,000 sales in the third quarter, representing a remarkable increase of nearly 60 percent compared to the same period last year and 37 percent from the previous quarter. The total transaction values in Dammam reached SAR 3.2 billion.
Meanwhile, Jeddah also saw a rise in quarterly activity, with transactions increasing by 10 percent to 7,500 and sales values climbing 9 percent to SAR 8.7 billion. However, annual sales volumes in Jeddah fell 19 percent, indicating a mix of market performance trends.
Sean Heckford, director of built asset consulting at Cavendish Maxwell, stated, “Riyadh’s rapid price appreciation in 2024 drove sharp increases in both sales and rental values, leading to affordability pressures and the introduction of a five-year rent freeze.” He added that “Jeddah has seen price stabilization and some easing in affordability constraints, while Dammam is benefiting from relatively lower entry prices, attracting both end-users and investors.”
During the quarter, residential prices rose in all three cities, with Riyadh experiencing the most significant gains. Average apartment prices in the capital increased by 7.5 percent year-on-year to SAR 6,160 per square meter, while villa prices grew by 10.1 percent to SAR 5,500 per square meter. In Jeddah, apartment prices saw a 1.6 percent increase, whereas villa prices rose by 3.1 percent. Dammam, too, recorded annual price increases of 5.8 percent for apartments and 3.2 percent for villas.
Riyadh Sees Strongest Rent Growth
Riyadh continues to lead in rental growth, with apartment rents climbing by 11.8 percent year-on-year and villa rents increasing by 10.7 percent. In contrast, Jeddah experienced a 5.6 percent rise in apartment rents, while villa rents saw a slight decline. Dammam recorded an increase of 4.8 percent for apartments and a 2.2 percent rise for villas.
Overall, around 13,500 new homes have been delivered across Riyadh, Jeddah, and Dammam in the first nine months of 2025. Total completions for the year are projected to reach 22,800 units, with an additional 105,000 homes planned for delivery in 2026 and 2027. By the conclusion of this year, Riyadh is expected to add approximately 16,000 new units, compared to 5,000 in Jeddah and 1,800 in Dammam. Over the next two years, Riyadh will account for the largest share of future housing supply, with 57,000 units slated for delivery, followed by 36,000 in Jeddah and 12,000 in Dammam.
The report indicates that upcoming regulatory changes are anticipated to reshape the market landscape in 2026 and beyond. A new foreign ownership law set to take effect in January is expected to bolster demand from international purchasers, while adjustments to the White Land Tax aim to encourage landowners to develop or sell undeveloped plots.
Heckford noted that Riyadh’s recent five-year rent freeze, announced in September, is likely to enhance affordability in the short term, though it might also reduce landlords’ motivation to maintain existing properties or invest in new supply, potentially placing added pressure on future development initiatives.
“Demand remains resilient despite affordability challenges, supported by regulatory reform and broader economic fundamentals,” he concluded. “Jeddah is showing stability, while Dammam stands out as a growth market. Vision 2030 initiatives and infrastructure investment will be key to sustaining momentum across Saudi Arabia’s major cities.”