The real estate market in Saudi Arabia is heading towards a new phase of growth and recovery with the upcoming implementation of new rules allowing foreigners to buy and own real estate from January 2026. Recent data from Knight Frank suggests that the move will boost demand and broaden the investor base, increasing the dynamism of the Saudi real estate market.
Residential demand drives the market
The first six months of 2025 saw a notable rise in residential real estate deals, accounting for around 63% of the total total deal value of SAR123.8 billion. The number of residential deals increased by 7% year-on-year, reaching around 93,700 deals with a total value of SAR 77.5 billion.
At the city level, Medina topped the growth rates in residential transactions by 49%, reaching a value of 3.4 billion riyals during the same period.
Madinah topped the growth rates in residential transactions by 49%.
New legislation and its expected impact
<The current market momentum is supported by increased mortgage financing, supportive government programs, and the delivery of new housing units in major metropolitan areas. With the foreign ownership rules coming into effect, the market is expected to see an even greater recovery.Faisal Durrani, Faisal Durrani said. Faisal Durrani, Partner and Head of MENA Research at Knight Frank, noted that "the expected demand from foreign investors is a strong catalyst for the market, with some 84% of them expressing interest in investing in Saudi Arabia."
Faisal Durrani, Partner and Head of MENA Research at Knight Frank, noted that "the expected demand from foreign investors is a strong catalyst for the market."
Riyadh real estate prices
Despite the slowdown in residential transactions in Riyadh, the downturn has not affected prices, which have continued to rise. Prices of average apartments rose by 10.6% in Q2 2025, reaching SAR 6,175 per square meter, driven by demand for vibrant neighborhoods and prime locations.
<According to the report, the launch of the Riyadh Metro in late 2024 has contributed to increased demand for areas with easy access to public transportation. Prices in some neighborhoods increased significantly, with Al Taawun neighborhood recording an increase of 32% to reach SAR 9,470 per meter, while prices in King Abdullah neighborhood increased by 17% to reach SAR 7,656 per meter.
The report indicates that the launch of the Riyadh Metro in late 2024 has contributed to the increase in demand for areas with public transport accessibility. <The report notes that the entry of foreign funds may boost joint ventures and stabilize the market, while domestic demand continues to drive sector growth. With these developments, Saudi real estate appears to be heading into a new boom period, driven by both local and foreign investments.
With these developments, Saudi real estate appears to be heading into a new boom period, driven by both local and foreign investments.
