<The residential real estate sector in Riyadh continues to register high demand, with villas accounting for 53.3% of total real estate transactions, reflecting buyers" preference for this type of unit. Despite the planned delivery of 28,943 residential units through 2025, the delay in new supply could lead to higher sale prices and rents, according to a recent report by JLL Real Estate Consultants.

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In Jeddah, villas dominated the market, with 53.3% of total real estate transactions, reflecting buyers" preference for this type of unit. <In Jeddah, residential apartments dominated transactions during 2024, expected to account for 82.8% of the total residential units scheduled for completion in 2025. However, limited supply may push purchase prices and rents further upwards.

In Jeddah, apartments dominated transactions during 2024, with an expected 82.8% of total residential units to be completed in 2025.

Saudi real estate market growth in 2026

JLL has predicted that the real estate market in Saudi Arabia will see significant expansion over the next year, supported by Vision 2030 and economic diversification. This forecast comes despite challenges posed by supply chain disruptions and rising construction costs.

The real estate market in Saudi Arabia is expected to expand significantly over the next year, supported by Vision 2030 and economic diversification. Amid global economic volatility, Saudi Arabia remains the leading GCC country in terms of growth, with the non-oil sector expected to rise to 5.8% in 2025 from 4.5% in 2024, benefiting from significant infrastructure investments and private sector participation.

These forecasts come despite the challenges of supply chain disruptions and rising construction costs.

Strong performance of the Saudi construction sector in 2024

Despite a slowdown in the Middle East and Africa construction sector in 2024, Saudi Arabia managed to maintain a strong performance with $29.5 billion worth of construction contracts awarded.

The residential sector saw $7.9 billion worth of contracts awarded, while the hospitality, leisure and mixed-use real estate sectors achieved notable growth, supported by preparations for major events hosted by the Kingdom in the coming years.

Despite a slowdown in the construction sector in the Middle East and Africa through 2024, Saudi Arabia managed to maintain a strong performance with $29.5 billion worth of construction contracts awarded.

Luxury office occupancy in Riyadh declines

Riyadh's office space sector saw strong demand through 2024, with the vacancy rate for Class A space dropping to just 0.2%, driving average rents up to $609 per square meter during Q4 2024.

Riyadh's office space sector saw strong demand through 2024, with the vacancy rate for Class A space dropping to just 0.2%.

With 326,600 square meters added to the market, there are still 888,600 square meters expected to enter the market in 2025, reinforcing the continuity of growth. In Jeddah, the Northwest region successfully attracted regional and international companies, while Dammam remained stable thanks to government demand.

2,312 new hotel rooms in 2025

Riyadh's hospitality sector is experiencing significant growth, driven by global events and corporate visitors, with average daily rates increasing by 13.3% to reach $239 in 2024. With 2,312 new hotel rooms expected to come online in 2025, Riyadh continues to strengthen its position as a major business and leisure center. In Jeddah, which relies on religious and leisure tourism, the hotel sector continues to maintain its strong performance despite some minor challenges, supported by the Kingdom's ambitious tourism goals.

Rents in malls rise

Riyadh's retail sector is shifting towards "experiential modes" that combine entertainment and shopping, with open-air shopping outlets such as the Boulevard becoming increasingly popular, while traditional indoor centers are facing occupancy challenges.

Riyadh's retail sector is shifting towards "experiential modes" that combine entertainment and shopping, with open-air shopping outlets such as the Boulevard becoming increasingly popular, while traditional indoor centers are facing occupancy challenges. Smaller malls saw rents rise by 5.5% during Q4 2024, while larger regional centers recorded a more modest rise of 1.8%, while rents in some regional centers declined by 9.3%.

Rental rates in some regional centers declined by 9.3%.

Warehouse and logistics rents rise

Riyadh and Jeddah are experiencing strong demand for logistics and warehousing services, which has led to rising rents in the industrial and logistics sector. This growth is due to the expansion of e-commerce and increased investments in logistics infrastructure.