The curtain has fallen on the year 2025 and its files have been closed, its pens have been lifted, and its real estate events have been folded with all its achievements and challenges in the Saudi real estate affairs, which during 2025 witnessed unprecedented transformations, with record numbers of transactions and a remarkable rise in prices, in light of huge residential and commercial projects and regulatory initiatives that support investment, making the market more dynamic and attractive to local and international investors.
The Saudi real estate market recorded unprecedented activity in the first half of 2025, with the number of residential deals reaching 93,700 transactions with a total value of about SAR 77.5 billion (~$20.6 billion), accounting for 63% of the total value of real estate activity. Madinah led the record growth in transaction value with a 49% increase over the same period of the previous year, with a total value of SAR 3.4 billion.
This strong activity reflects continued growing demand, driven by mortgage programs and the expansion of smart city projects and modern urban areas. Official data showed that real estate prices rose by 4.3% during the first quarter of 2025 compared to the same period in 2024, with prices in the residential sector rising by 5.1%.
In Riyadh, the average price per square meter for apartments was SAR 6,100, while luxury villas recorded SAR 5,396 per square meter.
In Jeddah, the prices of apartments ranged between SAR 4,200 and SAR 4,500 per square meter, while villas reached SAR 5,114 per square meter.
This increase reflects the continued demand for units in vital locations and proximity to new infrastructure projects, such as the Riyadh Metro.
And in Riyadh: Despite some transactions falling by as much as 20% in some segments, real estate prices rose due to strong demand for units in premium areas close to infrastructure.
In Jeddah and the Western Region: Jeddah achieved a 28% growth in transaction value, driven by investment in urban and tourism development.
But... why was 2025 an exceptional year?
The increase in real estate financing activity through new and flexible programs has enhanced the ability of investors and buyers to enter the market, in addition to huge urban projects, and the entry of new residential and commercial projects within the plans of Vision 2030 has provided wide investment opportunities.
If we look at the past year in terms of influential future legislation, we will find that we are in front of several legislations that will inevitably affect the Saudi real estate movement, including the upcoming implementation of the law for non-Saudis to own real estate in 2026, which is an incentive for investors to take advantage of current opportunities before the legislative change.
If this was the case in 2025, how will it be in 2026? The most prominent expectations for the new real estate year are an influx of new investments: New categories of investors will enter the real estate market with the implementation of the ownership law, which will increase liquidity and activity in the market.
The demand for smart and sustainable projects, especially residential units that are built within smart city schemes, will continue to be the focus of attention.
The most prominent expectation is a balance between supply and demand as the availability of new units and public projects will create a relative equilibrium and limit sudden price increases.
In conclusion, 2025 was an important milestone for the Saudi real estate market, with record-breaking numbers and a significant increase in prices and transactions. As new legislation comes into effect in 2026, the market will move into a phase of dynamic maturity and stability, reinforcing Saudi Arabia's position as a leading investment destination in the region.
Economist
