A recent report issued by Al Rajhi Capital showed that pressures on the Saudi real estate market continued during the second quarter of 2026, with a notable decline in activity in the residential and land sectors, compared to an improvement in the commercial sector, which managed to regain some of its momentum after a weak performance in the first quarter of the year.
The report indicated that the value of residential transactions fell by 21% year-over-year to 21 billion riyals, while the number of transactions fell by 19% to 21,300, indicating a continued slowdown in demand in the residential market.
In contrast, the commercial sector posted positive performance, with the value of transactions rising by 16% compared to the same period last year to reach 3.3 billion riyals, while the number of transactions increased by 9% to 422 transactions.
As for the land sector, continued to record the largest declines, with the value of transactions falling by 42% year-over-year to 23.8 billion riyals, while the number of transactions decreased by 26% to 22,200 transactions.
Riyadh Leads the Declines
The report noted that the capital, Riyadh, witnessed the largest correction in the real estate market, as the value of residential transactions by 34% to 9.2 billion riyals, with the number of transactions falling by 29% to 7,400 transactions.
In the land sector, the value of transactions fell by 63% to 6.2 billion riyals, while the number of transactions declined by 51% to 3,100 transactions.
Despite this weak performance, the commercial sector was the sole exception, as the value of its transactions jumped by 56% year-over-year to reach 2.8 billion riyals, despite the number of transactions falling by 4% to 226 transactions, reflecting the execution of large-volume transactions during the period.
Jeddah Records a Less Severe Decline
In the city of Jeddah, the report showed that the residential sector continued to decline but at a slower pace compared to Riyadh, with the value of transactions falling by 16% to 3.8 billion riyals, while the number of transactions declined by 25% to 3,200 transactions.
The value of commercial transactions also fell by 1% to approximately 190 million riyals, with the number of transactions declining by 5% to 37.
As for the land sector, it showed improvement compared to the first quarter, although the year-over-year comparison remained negative, with the value of transactions falling by 42% to 6.4 billion riyals, while the number of transactions fell by 28% to 2,400.
The report concluded that the Saudi real estate market continues to see uneven performance across sectors, with activity remaining weak in the residential and land sectors, while the commercial sector continues to show greater resilience, particularly in Riyadh, and signs of recovery appear more evident in the Jeddah market compared to previous months.
