The real estate sector in Saudi Arabia witnessed a significant enhancement of its contribution to GDP, reaching 26.7% of total non-oil private GDP in the third quarter of 2025, according to a recent report by GRA. <This growth reflects the sector's vital role in supporting the strategy of diversifying the national economy away from dependence on oil, supported by a continuous recovery in construction and development projects witnessed in various regions of the Kingdom. The sector's contribution to the overall GDP reached 14.1% in the same period, emphasizing its growing economic importance. Emiratization programs in the real estate sector witnessed a qualitative leap, as the percentage of Saudis working in it increased to 54.4% by the end of Q3 2025, compared to previous periods. This achievement reflects the success of government policies supporting the empowerment of national human capital and enhancing its participation in vital economic sectors, which enhances job opportunities and reduces unemployment rates among Saudi youth.
Real estate trading market fluctuations
In the financial trading market, real estate management and development companies showed an increase in the value of their transactions by 3.7% to reach 20.5 billion riyals during the third quarter, while real estate investment trusts (REITS) saw a decline in the value of their transactions by 14.6%. Reflecting the diversity of investment patterns in the sector and investors' response to market fluctuations and cycles of real estate activity, 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% over the same period, reflecting a healthy corrective movement that contributes to rebalancing prices and bringing them more in line with the 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 workers decreased slightly by 0.4% quarter-on-quarter, with a sharp decline in traditional real estate activities by 29.8% year-on-year, in contrast to a significant growth of 14.8% in the construction sector. These shifts are indicative of the concentration of new job opportunities in operational and field areas rather than administrative and marketing activities. Rental CPI continued to rise in September 2025, driven by an increase in actual and estimated residential rents, especially in major cities. This trend reflects increasing residential demand as a result of expanding economic activity, making rents one of the most important inflation factors associated with the real estate sector in the Kingdom.
<The GRA report shows that the Saudi real estate sector remains one of the main pillars in driving economic growth, with an increasing contribution and successful localization of jobs, despite the challenges the market is witnessing in terms of prices and job distribution. This reflects the sector's ability to adapt and transform to keep pace with market developments and the needs of the national economy.
