In the first half of 2025, Saudi Arabia‘s housing market surged to impressive heights, with total housing deals reaching a staggering $33 billion. This remarkable growth underscores the evolving real estate dynamics in cities such as Riyadh, Jeddah, and Madinah. As demand continues to rise, various factors, including increased investor confidence and strategic government initiatives, are shaping the landscape of real estate in this burgeoning market.
Surge in Saudi Housing Transactions
The city of Madinah marked a significant milestone, with transaction values soaring to SR3.4 billion ($906 million), a striking 49% increase compared to the same period in 2024.
Moreover, transaction volumes experienced a robust rise of 38%, indicating not only investor confidence but also heightened demand from end-users looking for homes. This upward momentum signals a thriving market despite challenges.
National Trends in Housing
Across the nation, the housing sector proved to be a pivotal component of the real estate market, constituting approximately 63% of the total transaction value of SR123.8 billion ($32.96 billion) recorded during H1 2025. This substantial contribution reflects the ongoing shift towards residential property investments.
Residential transactions rose by 7% year-on-year, with volumes nearing 93,700 and a total value of SR77.5 billion ($20.6 billion). The increase in mortgage activity, supportive government policies, and a surge in housing supply in key urban centers have all been instrumental in driving this growth.
According to Faisal Durrani, Partner and Head of Research, MENA at Knight Frank, “One of the most significant legislative developments this year has been the approval of the new Law of Real Estate Ownership by Non-Saudis.” He further stated, “Set to come into effect in January 2026, this new ownership framework is expected to deepen market liquidity and improve investor sentiment.”
Riyadh’s Market Dynamics
Transitioning to Riyadh, the market experienced a recalibration phase in H1 2025, with transaction volumes declining by 31% year-on-year. The total transaction value eased by 20% to SR29 billion ($7.71 billion), yet home prices continued to rise. Average apartment prices in the area increased by 10.6%, reaching SR6,175 ($1,642) per square meter, particularly in districts adjacent to the new Riyadh Metro.
Districts such as Al Taawun and King Abdullah saw significant gains, with prices escalating by 32% and 17%, respectively. Meanwhile, the average villa price also climbed to SR5,470 ($1,456) per square meter, an 8.2% increase year-on-year. Northern Riyadh maintained its status as the priciest area for villas, with prices averaging SR8,660 ($2,306) per square meter.
Harmen De Jong, Regional Partner and Head of Consulting, MENA at Knight Frank, noted, “Riyadh remains one of the Kingdom’s most dynamic markets,” attributing its resilience to Vision 2030 initiatives and significant infrastructure investments.
Jeddah’s Growth Trajectory
Contrastingly, the Jeddah market displayed a positive trajectory, with transaction volumes escalating by 19% and total values rising 28% to SR17.3 billion ($4.6 billion). The average apartment price increased by 2.7% to SR4,324 ($1,150) per square meter, primarily in central and western districts that are seeing robust growth.
Villa prices in Jeddah also saw an uptick of 3.2%, averaging SR5,040 ($1,341) per square meter, driven largely by demand in the northern districts. Notably, integrated communities like Roshn’s Al-Arous are gaining traction due to their lifestyle-centric urban designs, appealing particularly to coastal residents.
Demand in Holy Cities
The holy city of Madinah continued to experience momentum, with transaction values climbing by 49% to SR3.4 billion ($906 million) and deal volumes rising 38%. Average apartment prices in Madinah grew by 2.5% to SR3,835 ($1,020) per square meter, although villa prices saw a minor dip to SR3,500 ($933) per square meter.
Meanwhile, Makkah witnessed a 33% decline in transaction values; however, deal numbers rose by 11%. This shift indicates a changing market preference towards smaller, more affordable housing units. Average apartment prices slipped slightly by 0.5% to SR3,650 ($973) per square meter, while villa prices saw a slight increase of 0.4% to SR3,420 ($913) per square meter.
As noted by Amar Hussain, Associate Partner and Research Analyst with Knight Frank, “Large-scale government-backed projects are transforming the urban fabric of Makkah and Madinah.” He added that developments like the Masar Destination in Makkah and the Rua Al Madinah project are enhancing both cities’ appeal, ultimately supporting broader economic and tourism goals.