Saudi Arabia's residential real estate market has experienced significant growth over recent years, particularly in key urban centers like Riyadh, Jeddah, and Dammam. Thanks to the Kingdom’s ambitious Vision 2030 strategy, aimed at diversifying the economy and fostering sustainable urban development, the market is flourishing. As the government promotes large-scale housing projects and encourages homeownership, transaction volumes have risen, and property values continue to climb. Below, we explore the key drivers, trends, and future outlook of the market based on CBRE's Saudi Arabia Residential Real Estate Market Report 2024.
Surge in Transaction Volumes and Property Prices
In the 12 months leading up to Q2 2024, Saudi Arabia's three major cities—Riyadh, Jeddah, and Dammam—have seen a substantial increase in sale transaction volumes. Riyadh witnessed a 51.6% rise in sales, culminating in a total of 18,500 transactions valued at around SAR 26.6 billion. Compared to pre-pandemic levels in Q2 2019, Riyadh recorded an impressive 56.1% growth in transaction volume, signalling strong post-COVID recovery. This surge highlights the capital’s role as a major residential hub, with both domestic buyers and expatriates contributing to demand.
Jeddah, the Kingdom's second-largest city and an important commercial center, recorded even stronger growth, with sales volumes rising 66.9% over the same period. This reflects the city’s increasing attractiveness for residential property investments, driven by ongoing infrastructural improvements and the expansion of housing projects. Similarly, Dammam, the key city in the Eastern Province, recorded a 49.8% increase in sales volume since 2019, further underscoring the growing demand for residential properties across the country.
The average price of villas in Riyadh has risen sharply, registering a 12.2% annual growth since Q1 2020. Prices are expected to continue climbing as demand exceeds supply, especially in prime areas where modern developments are limited. Meanwhile, apartment prices have also grown consistently. In Q2 2024, apartment prices in Riyadh averaged SAR 4,971 per square meter, while Jeddah saw prices hover around SAR 4,027 per square meter. Dammam’s price trends have been similarly positive, reflecting overall market strength.
This growth in both villas and apartments suggests that as the economy expands and population growth intensifies, the demand for varied housing options, from luxury to mid-market homes, will remain robust in the years to come.
Saudi Arabia's Key Cities, Residential Market, Transaction Volumes
Rising Prices for Villas and Apartments
The residential real estate market in Saudi Arabia has seen a continuous rise in property prices, particularly for villas and apartments. Since Q1 2020, the average price of villas in Riyadh has grown by 12.2% annually, reflecting the increased demand for modern, luxury housing as more professionals and families migrate to the capital. This trend is expected to continue as more high-end residential developments come online, adding modern stock to the market. By Q2 2024, average villa prices reached SAR 5,824 per square meter, marking a significant shift in property values as demand outstrips supply.
In the apartment segment, prices have also experienced strong growth. As of Q2 2024, apartment prices in Riyadh averaged SAR 4,971 per square meter, representing a 6.6% year-on-year increase. The rising cost of apartment units reflects the broader trend of urban migration, where professionals are moving to the capital for work, driving demand for affordable yet modern housing options.
Jeddah has seen similar growth in apartment prices, with the average price per square meter now around SAR 4,027. Dammam, following similar trends, also saw apartment prices increase, reflecting a growing demand across multiple cities. This rise in prices, especially in prime urban areas, underscores the need for both luxury and mid-market housing options as the Kingdom experiences rapid urbanization and economic transformation.
In addition to market demand, the supply-demand imbalance in key cities is another factor driving these price increases. The influx of new, modern housing units in the next few years may offer some relief; however, the current market conditions point toward continued price appreciation, especially in the villa and apartment segments.
Riyadh Residential Apartment Market, Average Sale Price, SAR/SQM
Demand Drivers: Urban Expansion, Economic Growth, and Supply Constraints
Several factors are driving this impressive growth in the residential real estate market. Chief among them is urban expansion driven by population growth and economic reforms. Riyadh, for example, has become a focal point for job creation, particularly in sectors such as finance, technology, and entertainment, leading to increased migration and housing demand. This trend is mirrored in Jeddah and Dammam, where growing professional populations are pushing demand for residential units.
Additionally, supply constraints have contributed to rising property values. While there are several new developments in the pipeline, many buyers are holding off for the release of new modern stock, which promises higher-quality finishes and amenities than the aging existing stock. The upcoming modern residential units will likely offer more luxury features, further attracting buyers and investors.
Government initiatives such as mortgage reforms have also played a key role in boosting homeownership. These policies, aimed at making financing more accessible to the general population, are encouraging first-time homebuyers to enter the market. As Saudi Arabia’s population continues to grow, especially in urban areas, the demand for affordable housing alongside luxury developments is becoming more pronounced.
Rental Market Growth and the Impact of the EJAR Platform
Saudi Arabia’s rental market, particularly in Riyadh, has also shown substantial growth. The EJAR platform, a government-mandated online portal for registering rental contracts, has had a significant impact on the market’s performance. In the year to July 2024, rental transactions for apartments in Riyadh increased by 6.1%, highlighting the strength of the rental sector in the capital. The platform has increased transparency, ensuring that all rental agreements are properly documented, which has helped to create more trust and security for both landlords and tenants.
By requiring all rental contracts to be registered on EJAR, the government has not only simplified rental procedures but also boosted investor confidence. This digital platform prevents illegal transactions and ensures that all contracts meet regulatory requirements, contributing to long-term market stability. Notably, the platform had a marked effect on market performance in the final quarter of 2023, paving the way for sustained growth in 2024.
The rental market is particularly appealing to expatriates and young professionals moving to cities like Riyadh and Jeddah, where homeownership may not be immediately accessible. This segment of the population is fueling demand for high-quality rental units, particularly in well-located areas near business districts and major infrastructure developments.
Jeddah, Residential Apartment Market, 000s Rental Registrations
Looking Ahead: Continued Growth in 2025 and Beyond
Saudi Arabia’s residential real estate market is poised for continued growth in 2025 and beyond, driven by a combination of government initiatives, urban expansion, and increased demand for modern housing. The introduction of new high-quality housing units, particularly in major cities like Riyadh and Jeddah, will likely fuel further interest from investors and residents alike.
As the government continues to invest in mega-projects like NEOM and The Line, as well as large-scale housing developments in Riyadh and Dammam, the need for modern, sustainable residential options will increase. These projects, many of which emphasize sustainability and smart living technologies, are expected to attract both domestic and international buyers, further driving demand.
Moreover, the government’s focus on creating sustainable urban environments through the development of smart cities and eco-friendly residential projects will continue to attract investors who prioritize long-term environmental impact. The shift towards sustainable living is expected to influence both design and construction trends in Saudi Arabia, creating more opportunities for green real estate development.
With the population continuing to grow and economic reforms pushing for greater homeownership, Saudi Arabia’s residential real estate market offers promising prospects for developers, investors, and homebuyers. As more modern stock comes online and the rental sector strengthens, the Kingdom’s housing market is well-positioned to capitalize on both domestic and international interest in the coming years.
Conclusion
Saudi Arabia’s residential real estate market is thriving, with Riyadh, Jeddah, and Dammam leading the charge in terms of transaction volume and property price growth. Thanks to Vision 2030, urban expansion, and an influx of new housing developments, the market is expected to continue growing in the years to come. Whether through homeownership initiatives, supply-demand dynamics, or the rise of smart and sustainable housing, the Kingdom’s residential market presents significant opportunities for investors and developers looking to tap into a rapidly evolving sector.
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