Saudi home sales surge ahead of 2026 law

The Holy City of Madinah had the best growth in residential deals across Saudi Arabia in the first six months of 2025, rising as much as 49% to SR3.4 billion.

Elsewhere in the Kingdom, there’s bullishness in the property market as new rules that will allow foreign investors to buy takes effect from 2026.

“While it’s still too early to assess any impact on the residential market, we are aware of international demand – particularly from international Muslim HNWI (high networth individuals), 84% of whom are keen to invest in the Kingdom,” said Faisal Durrani, Partner – Head of Research, MENA at Knight Frank.

 “The change in the international ownership laws have been long-anticipated.”

Demand for housing continues to drive the Saudi real estate sector, making up 63% of the SR123.8 billion in transaction value during H1-2025. The number of residential transactions rose 7% year-on-year to nearly 93,700 deals, with a total value of SR77.5 billion.

“This sustained momentum is underpinned by increased mortgage activity, government support schemes and the delivery of new housing stock in key urban locations,” says the Knight Frank report.

According to Durrani, “One of the most significant legislative developments this year has been the approval of the Law of Real Estate Ownership by non-Saudis.

“This comes at a time when key markets like Riyadh are starting to stabilise as we approach the government’s 70% home ownership target and high house prices subdue demand to an extent.”

2026 will be a gamechanger for Saudi property

In another four months or so, foreign nationals will be allowed to invest in Saudi real estate, as the Kingdom joins some of its other GCC peers in opening up key markets.

This is where even with high property prices in markets such as Riyadh, the foreign fund inflow will come in handy. There is already speculation about quite a sizable pent up demand to acquire property and plots in the Kingdom, many of which could be in the form of JVs.

Of course, there is also the effect brought on by Dar Global’s launch of a Trump Tower in Jeddah and with more Trump-branded projects to follow in Riyadh.

How’s Riyadh faring?

For some time now, property market sources had been talking about Riyadh homes getting over-priced and making it difficult for younger Saudis to enter the market.

It did lead to lower transactions on residential units – but ‘this cooling in transactional activity has not translated into downward pressure on (Riyadh home) prices’, says the Knight Frank report.

Average apartment prices in Riyadh rose 10.6% in Q2-2025 to reach SR6,175 per square meters ‘driven by strong appetite in well-connected and centrally located districts’.

“The launch of the Riyadh Metro in late 2024 has also fuelled demand in areas with improved transit access,” the report adds.

Locations such as Olaya, Al Yasmin and Hittin have seen ‘strong uplift’, while Al Taawun recorded a 32% price increase to SR9,470 per square metre, while prices in King Abdullah District rose 17% to SR7,656.

“Even in budget-sensitive southern Riyadh, average apartment prices edged up to SR3,000 psm, reflecting sustained interest from first-time buyers,” the report adds.

According to Harmen De Jong, Knight Frank’s Regional Partner – Head of Consulting, MENA, “The implementation of the foreign ownership law next year will energise the market by boosting liquidity and enhancing the quality of developments.

“Riyadh’s current market adjustment is part of a broader and healthier evolution, positioning the city for more diversified and sustainable long-term growth.”

Story by Gulf News