The residential real estate market in Saudi Arabia is undergoing a new phase of rebalancing after a period of accelerated growth, with indicators beginning to reveal a clear divergence in performance between major cities. While the pace of price growth in Riyadh is slowing down, other cities such as Jeddah and Dammam are maintaining stable demand levels, driven by different economic and developmental factors that reflect the diverse dynamics of the real estate market in the Kingdom.
According to Real Estate Market in Saudi Arabia. <In a recent report, JLL JLL reported that residential real estate prices recorded a significant slowdown after a period of strong growth, particularly in the capital city of Riyadh. This relative decline does not reflect a general weakness in the market, but rather a difference in supply and demand patterns between the Kingdom's major urban centers.
<Other cities are still experiencing strong demand accompanied by continued price increases, confirming a clear disparity in the dynamics of the real estate market. Despite this disparity, demand for residential units in major Saudi cities remains at high levels, supported by population growth and major investment projects, especially in Riyadh, which continues to play a pivotal role in stimulating real estate activity.
In this context, Jeddah and the Dammam metropolitan area - which includes Dammam, Khobar and Dhahran - maintain relatively stable demand, driven by economic diversification efforts and infrastructure development initiatives, which enhances their residential and investment attractiveness.
Residential Supply and Developments:
According to the report, total residential inventory in Riyadh totaled around 2.18 million units by the end of the third quarter of 2025, with approximately 9,468 additional units expected to enter the market during the remainder of the year.According to the report, the total residential inventory in Riyadh totaled around 2.18 million units by the end of the third quarter of 2025. Jeddah's housing supply reached 1.23 million units, with 4,320 new units completed during the third quarter of the same year.
Jeddah's housing supply reached 1.23 million units. In Dammam, about 428 units were completed during the third quarter, bringing the total inventory to about 725.8 thousand units, with about 400 more units expected to be added before the end of the year.
Price movement in major cities:
Sale prices in Riyadh continued their upward trajectory from the beginning of the year to the third quarter of 2025, with apartment prices increasing by 10.3% year-on-year to reach SAR 6,501 per square meter, while villa prices grew by 9.6% to reach SAR 6,810 per square meter, with average luxury villa prices reaching SAR 10,223 per square meter.
In Jeddah, performance was mixed, with apartment prices falling by 2.8% compared to last year to reach SR4,477 per square meter, while villa prices rose by 3.1% to reach SR6,668 per square meter.
In Dammam, the average price of luxury villas reached SR10,223 per square meter. The city of Dammam witnessed a relatively weaker performance, as apartment prices stabilized with a slight increase of only 0.3%, bringing the average price to 3,578 SAR per square meter, while villa prices increased by 1% to 4,917 SAR per square meter.
In Dammam, the trend continued. In Al Khobar, the upward trend in prices continued from the beginning of the year to Q3 2025, with apartment prices increasing by 5% annually to reach 3,956 riyals per square meter, and villa prices recorded an annual increase of 1.6% to reach 6,104 riyals per square meter.
And in Khobar, the upward trend in prices continued from the beginning of the year to Q3 2025.
Demand trends and regulatory policies:
While the rising cost of ownership is driving a growing segment of buyers towards apartments, a new trend is emerging: the popularity of townhouses, which offer a balanced combination of the benefits of apartments and villas in terms of space and privacy, at relatively more favorable prices.On the policy side, the report noted. On the policy side, the company expects the implementation of a five-year rent freeze on residential and commercial contracts - whether new, renewed or vacant - to help stabilize the cost of living and limit speculative increases, which could redirect investments towards long-term real estate assets and quality development projects.
On the policy side, the company expects the implementation of a five-year rent freeze on residential and commercial contracts - whether new, renewed or vacant - to further stabilize the cost of living and limit speculative increases.
