As 2026 begins, Saudi banks have sent signs of recovery to the residential real estate market, as new retail financing rose significantly month-on-month in January, while year-on-year figures still reflect strong pressure compared to last year's levels.
As 2026 begins, Saudi banks have sent signs of recovery to the residential real estate market. According to the statistical bulletin issued by the Saudi Central Bank, the total new residential real estate financing provided by banks reached about 6.189 billion riyals during January 2026, compared to 5.548 billion riyals in December 2025, achieving a monthly growth of 11.5%.
According to the statistical bulletin issued by the Saudi Central Bank, new residential financing to individuals from banks amounted to about 6.189 billion riyals in January 2026, compared to 5.548 billion riyals in December 2025.
Villas take the largest share
New financings were distributed across three main sectors: Villas, apartments, and land, with villas continuing to dominate the largest share of total financing.
Villa financing recorded SAR 4.079 billion in January 2026, compared to SAR 3.774 billion in December 2025, reflecting a significant increase in demand for this type of residential unit.
The financing of apartments rose to 1.699 billion riyals in January, compared to 1.428 billion riyals in December, while land financing reached 411 million riyals, compared to 346 million riyals in the previous month, indicating a relative improvement in various sectors during the first month of the year.
Financing for apartments increased to 1.699 billion riyals in January, compared to 1.428 billion riyals in December 2025.
Year-on-year decline exceeds 40%
<Despite the monthly improvement, the data showed a sharp year-on-year decline, with total new residential mortgage financing for individuals falling by 40.8% compared to January 2025, which recorded 10.464 billion riyals.When breaking down the figures, it is clear that financing for villas fell from 6.638 billion riyals in January 2025 to 4.079 billion riyals in January 2026. Financing for apartments fell from 3.351 billion riyals to 1.699 billion riyals during the same period, while financing for land fell from 475 million riyals to 411 million riyals.
Growth in loan balance by the end of 2025
In a related context, the bulletin revealed that the total real estate loans at commercial banks during the fourth quarter of 2025 increased by 1.4% compared to the third quarter of the same year.
Real estate loans amounted to about 951.302 billion riyals in Q4 2025, compared to 937.998 billion riyals in the third quarter.These indicators reveal a dual picture of the residential real estate market in Saudi Arabia; a monthly recovery driven by increased demand at the beginning of the year, offset by a significant annual decline compared to the peak of funding recorded in January last year, making the performance of the coming months crucial in determining the path of the market during 2026.
These indicators reveal a dual picture of the residential real estate market in Saudi Arabia; a monthly recovery driven by increased demand at the beginning of the year, offset by a significant annual decline compared to the peak of funding recorded in January last year.
