As the real estate market in Saudi Arabia awaits indicators of recovery at the beginning of a new year, official data revealed a significant contraction in the pace of housing financing provided to individuals through financing companies during January 2026, in a signal that reflects caution in purchasing decisions, especially in the apartment and land sectors, despite a relative improvement in the financing of villas.According to the monthly statistical bulletin issued by the Saudi Central Bank, the total new residential real estate financing for individuals through financing companies amounted to about 176 million riyals during January 2026, compared to 219 million riyals in December 2025, recording a monthly decline of 19.6%.

Apartments and land lead the decline
New financings during January were distributed across three main sectors: Villas, apartments, and land, and the data showed that the financing of apartments acquired the largest share of 92 million riyals, but decreased compared to last December, which recorded 114 million riyals.
The financing of land witnessed the most prominent decline, falling to only 8 million riyals in January, compared to 31 million riyals in December, reflecting the decline in the demand for the purchase of residential land.In contrast, villa financing recorded a relatively stable performance, reaching SAR 76 million in January, compared to SAR 74 million in December, indicating continued demand for this type of housing units.

Financing for villas saw the most notable decline, falling to only SAR 8 million in January, compared to SAR 31 million in December, reflecting the decline in demand for residential land.

Year-on-year decline of more than 24%
Year-on-year, the data showed a larger decline in total new residential mortgage financing for individuals, falling by 24.5% compared to January 2025, which recorded 224 million riyals.However, a reading of the details reveals a striking contrast between the sectors; villa financing rose significantly to reach SAR 76 million in January 2026, compared to SAR 38 million in the same month last year, reflecting a near doubling of financing for this sector.
In contrast, apartment financing fell sharply from SAR 157 million in January 2025 to SAR 92 million in January 2026, and land financing fell from SAR 29 million to SAR 8 million during the same period.

During the same period.

Shifts in demand trends
These figures reveal clear shifts in buyers' priorities, as demand appears to be more focused on villas than apartments and land, in light of financing and economic variables that may push individuals to rearrange their housing options.
With continued challenges associated with financing costs and real estate prices, the figures for the coming months remain an important indicator to measure the trends of the residential real estate market and its ability to regain momentum during 2026.

These figures reveal a clear shift in buyers' priorities, as the demand for villas appears to be more focused on apartments and land, in light of financing and economic variables that may push individuals to rearrange their housing options.