The the real estate sector in the Kingdom of Saudi Arabia saw a significant increase in its contribution to gross domestic product (GDP), reaching 26.7% of total non-oil private output during the third quarter of 2025, according to a recent report issued by the General Real Estate Authority.
This growth reflects the vital role the sector plays in supporting the strategy to diversify the national economy away from dependence on oil, bolstered by a sustained recovery in construction and development projects across various regions of the Kingdom. Furthermore, the sector’s contribution to gross domestic product reached 14.1% during the same period, underscoring its growing economic importance. Saudization programs in real estate sector a quantum leap, with the percentage of Saudis working in the sector rising to 54.4% by the end of the third quarter of 2025, compared to previous periods. This achievement reflects the success of government policies aimed at empowering the national workforce and enhancing its participation in vital economic sectors, thereby boosting employment opportunities and reducing unemployment rates among Saudi youth.
Fluctuations in the Real Estate Market
In the financial market, real estate management and development companies saw a 3.7% increase in the value of their transactions, reaching 20.5 billion riyals during the third quarter, while real estate investment trusts (REITs) saw a 14.6% decline in the value of their transactions. These figures reflect the diversity of investment patterns in the sector and investors" response to market fluctuations and real estate cycles. Real estate prices responded to the slowdown in financing liquidity, with the real estate price index recording a quarterly decline of 1.1% and an annual decline of 0.9%. The most notable decline was in villa prices, which fell by 2.5% during the same period, reflecting a healthy correction that helps rebalance prices and bring them more in line with current purchasing power in the market.
Structural Shifts in the Real Estate Labor Market
The real estate labor market witnessed notable shifts; the total number of employees declined slightly by 0.4% on a quarterly basis, with a sharp decline in traditional real estate activities of 29.8% year-over-year, offset by significant growth of 14.8% in the construction sector. These shifts indicate that new job opportunities are concentrated in operational and field-based roles rather than in administrative and marketing activities. The Consumer Price Index for rents continued to rise in September 2025, driven by increases in actual and estimated residential rents, particularly in major cities. This trend reflects growing residential demand resulting from expanding economic activity, making rents one of the most significant inflationary factors linked to the real estate sector in the Kingdom.
A report by the General Real Estate Authority shows that the Saudi real estate sector remains a key pillar in driving economic growth, with an increasing contribution and successful job localization, despite the challenges the market faces in terms of prices and the distribution of job opportunities. This reflects the sector’s ability to adapt and transform to keep pace with market developments and the needs of the national economy.
