Saudi house price fall speeds up in first quarter

• Drop continues from Q4 2025
• Led by residential sector
• Land taxes help bring down prices

Real estate prices dropped across Saudi Arabia in the first quarter, accelerating the fall that began in the previous quarter.

The fall follows government measures to cool the market, including higher taxes on undeveloped land and efforts to boost supply.

The Real Estate Price Index, which is released by the General Authority for Statistics (Gastat), recorded a drop of 1.6 percent in the first quarter of this year compared to the same period in 2025. 

It attributed the drop primarily to a decline in residential sector prices, which fell by 3.6 percent year on year. Commercial prices increased by 3.4 percent.

It follows a 0.7 percent drop in the fourth quarter of 2025, which was the first time house prices fell in five years and the steepest fall since 2019.

The Saudi government launched a number of initiatives last year to tackle rising housing costs, which Crown Prince Mohammed bin Salman described as “unacceptable”.

Developers say these measures, which include the increase of “white land taxes” in Riyadh – taxes imposed on owners of underdeveloped or vacant land plots – have helped bring down prices that have skyrocketed in recent years.

According to UK-based property consultancy Knight Frank, the price of apartments in the capital doubled between 2019 and 2025.

“After the white land tax announcement, all land values dropped,” said Omar Alabdullatif, CEO of Riyadh-based developer Blacksand.

The fall in house prices also contributed to a stabilisation of overall inflation during the first month of the war between the US and Israel, and Iran.

Despite increased logistics costs and supply chain disruptions, the consumer price index increased by just 0.1 percentage points from February 2026 to reach 1.8 percent.

• Saudi construction surge defies war pressures
• Kingdom Holding signs $1bn land deal with Sumou
• King Salman Park attracts $4bn for two projects