Saudi Arabia’s housing market reached nearly $33 billion in deals during first half of 2025, according to Knight Frank Residential Market Overview.

Madinah led growth with transactions increased by  49% to $906 million and Jeddah gained momentum with a 28% jump in values while Riyadh saw a market recalibration despite rising prices.  

This growth is due to the upcoming foreign ownership law in 2026 and major Vision 2030 initiatives aiming to boost long term growth.

Increasing Saudi Arabia’s Housing Market

The Saudi housing market has emerged as a pivotal sector within the broader real estate framework, accounting for approximately 63% of the total transaction value of SAR 123.8 billion (around $32.96 billion) recorded in the first half of 2025. 

This growth trajectory is indicative of a thriving economy and increasing investor confidence, bolstered by favorable government policies and a burgeoning mortgage market.

Madinah: Leading the Charge

Madinah has emerged as a standout performer in the Saudi housing market, showcasing the highest growth rates in H1 2025. The city recorded transaction values of approximately $906 million, marking a staggering 49% increase compared to the same period in 2024.

Factors Contributing to Madinah’s Growth

Several elements have contributed to Madinah’s impressive performance:

• Increased Demand: The city’s unique cultural and religious significance has led to heightened demand for residential properties.
• Investor Confidence: The positive sentiment among investors is reflected in the 38% rise in transaction volumes, indicating a strong belief in the city’s real estate potential.
• Development Projects: Ongoing urban development initiatives are enhancing the city’s infrastructure and living conditions, making it an attractive destination for residents.

Price Trends in Madinah

Despite the surge in transaction values, the average apartment prices in Madinah have seen a modest increase of 2.5%, reaching approximately $1,020 per square meter. Villa prices, however, experienced a slight decline, averaging around $933 per square meter.

Jeddah’s Gaining Momentum

In contrast to Madinah, Jeddah has also shown significant growth in its housing market. The city experienced a 19% increase in transaction volumes, with total values rising by 28% to approximately $4.6 billion.

Key Growth Drivers in Jeddah

Jeddah’s real estate market is buoyed by several factors:

• Urban Development: Integrated, master-planned communities are attracting buyers with their focus on lifestyle and urban design.
• Coastal Appeal: The city’s coastal location enhances its desirability, particularly for those seeking a vibrant urban lifestyle.
• Diverse Property Options: The availability of various property types, from apartments to villas, caters to a wide range of buyers.

Price Dynamics in Jeddah

The average apartment prices in Jeddah rose by 2.7% to approximately $1,150 per square meter, while villa prices increased by 3.2% to around $1,341 per square meter. This upward trend reflects the growing demand for residential properties in the city.

Riyadh’s Market Recalibration

Riyadh, the capital city, has entered a phase of recalibration in H1 2025, experiencing a 31% decline in transaction volumes compared to the previous year. Despite this downturn, the average prices of residential properties have continued to rise, indicating a complex market dynamic.

Understanding Riyadh’s Market Dynamics

The decline in transaction volumes can be attributed to several factors:

• Price Adjustments: Despite the decrease in transaction numbers, average apartment prices in Riyadh rose by 10.6% in Q2 2025, reaching approximately $1,642 per square meter.
• Market Stabilization: The market is undergoing a necessary adjustment as it aligns with the government’s target of achieving 70% home ownership.
• Infrastructure Investments: Ongoing investments in infrastructure, particularly related to the Riyadh Metro, are expected to enhance property values in the long term.

Price Trends in Riyadh

The average prices for villas in Riyadh also saw an increase, averaging around $1,456 per square meter, with northern districts remaining the most expensive at approximately $2,306 per square meter. 

This indicates that while transaction volumes may have decreased, the demand for quality properties remains strong.

Key Drivers of Growth

Several factors have contributed to the remarkable growth in Saudi Arabia’s housing deals:

• Government Initiatives: The Saudi government has implemented various schemes to promote home ownership, including subsidized mortgage rates and incentives for first-time buyers.
• Legislative Changes: The anticipated introduction of the new Law of Real Estate Ownership by Non-Saudis in January 2026 is expected to further stimulate market activity by allowing foreign investors to participate more actively in the housing sector.
• Increased Demand: A growing population and urbanization have led to heightened demand for residential properties, particularly in major cities.

Shaping Saudi’s Housing Landscape

Saudi Arabia’s housing market has demonstrated remarkable resilience and growth in the first half of 2025, with total deals reaching an impressive $33 billion. Cities like Madinah and Jeddah have emerged as key players, while Riyadh is undergoing a necessary recalibration. 

The anticipated foreign ownership law and ongoing government initiatives are set to further enhance the market’s appeal, paving the way for a vibrant and dynamic real estate landscape in the years to come.

Planned Real Estate Projects in Riyadh

Dar Global and Mouawad’s Villa Project

Dar Global, an international real estate developer, has partnered with luxury jeweler Mouawad to unveil a $235 Million Villa Project in North Riyadh, close to the World Expo 2030 site. 

The development will include 200 exquisite villas, similar to the prestigious Bulgari Residences, and aims to boost Riyadh’s reputation as a top luxury destination. 

Scheduled for completion in 2026, this project represents Dar Global’s debut in Saudi Arabia and Mouawad’s entry into the real estate market.

The Avenues Riyadh

The highly anticipated Avenues Riyadh project, valued at $4.58 billion, has reached 44.5% completion and is scheduled to open in early 2026. 

Situated in northern Riyadh, this iconic development, inspired by Salmani architecture, will cover 390,000 square meters and host one of the Middle East’s largest malls. 

It will also feature three luxury hotel towers: Waldorf Astoria, Canopy by Hilton, and Conrad. This project supports Saudi Vision 2030’s goal of making Saudi Arabia a leading global tourist destination.

Boulevard Business Park

Saudi Arabia’s General Entertainment Authority has unveiled plans for a $266 million business park at Boulevard City in Riyadh. 

Named the “Boulevard Business Park,” this new project will consist of nine buildings with views of the Boulevard City Fountain, an outdoor art gallery, and a suspended pool. 

The initiative aims to promote creativity, innovation, and support for entrepreneurs and businesses, in line with Saudi Vision 2030.

New Murabba

The most recent video demonstrates significant advancements in the construction of the New Murabba, the largest contemporary downtown in northwest Riyadh. 

A remarkable 5 million cubic tonnes of soil have already been removed, and the project is making notable headway. 

This ambitious venture covers an area of 19 square kilometers and will include the distinctive cube-shaped Mukaab at its heart, capable of holding 20 Empire State Buildings.

King Salman Park

King Salman Park, the largest urban park in the world, is scheduled to open in 2024, covering a total area of 16 square kilometers. 

The park includes 11 square kilometers of greenery and water features in the heart of Riyadh. 

Its major attractions will be a Royal Arts Complex, an equestrian center, an 850,000-square-meter Royal golf course, and the city’s first skydiving center. 

In addition, the park will offer over 2,000 hotel rooms and aims to elevate the quality of life in the city, following the goals of Saudi Vision 2030, thereby improving Riyadh’s global ranking.

Riyadh Rise Tower

Saudi Arabia Holding Co. has unveiled its plans for the Rise Tower, which is set to become the world’s tallest skyscraper in Riyadh, surpassing even the renowned Burj Khalifa. The unveiling of Rise Tower’s plans is a significant component of the broader North Pole Project in Riyadh.

Rise Tower is anticipated to exceed 828 meters to outshine the Burj Khalifa. There are speculations that Rise Tower might ascend to a staggering 2 kilometers, doubling the Burj Khalifa’s current height.

With these transformative projects, Riyadh, one of the world’s top 15 fastest-growing cities, is transforming into a city known for its accessibility and quality of life to become among the world’s top 10 cities with an investment of $1 trillion over the next seven years.

Keep Reading: Dar Global and Mouawad Announce $235 Million Luxury Villa Project in Riyadh