Residential sales in Riyadh fell by nearly half during the third quarter of 2025.  Rising house prices dented demand and raised concerns about affordability, realResidential sales in Riyadh fell by nearly half during the third quarter of 2025.  Rising house prices dented demand and raised concerns about affordability, real

Residential sales plummet in Riyadh as prices rise

2025/12/23 19:25
  • Q3 sales drop of almost half
  • Prices still rose during quarter
  • New land tax laws to ease situation

Residential sales in Riyadh fell by nearly half during the third quarter of 2025. 

Rising house prices dented demand and raised concerns about affordability, real estate and property consultancy Cavendish Maxwell said.

Riyadh recorded residential sales in volume terms of 13,000 between July and September, down from 23,400 during the same period last year. 

The value of sales fell to SAR17.6 billion ($4.69 billion) during the quarter, down from SAR32.3 billion in the same period last year.

The year-on-year decline of around 45 percent was driven by affordability pressures following a rapid price appreciation seen during 2024 and higher financing costs.

House prices have continued to rise during the quarter, with average apartment and villa prices rising 7.5 percent and 10 percent year on year, respectively.

The government imposed a White Land tax in May 2025 on undeveloped lands to encourage property development and curb speculation. The tax is expected to stimulate market activity and bring additional supplies.

Real estate company Cavendish Maxwell expects the regulatory push will help narrow the gap between Riyadh’s housing demand and supply, potentially easing price pressures and improving overall affordability.

The new opening up of ownership rules for foreign buyers from 2026 is also expected to unlock “significant demand” from regional investors, particularly in Riyadh and other major cities, the consultancy said.

Further reading:

  • ‘Metro premium’ pushes up Riyadh house prices
  • New website to record all real estate deals by non-Saudis
  • Real estate law is a turning point for Saudi Arabia

Dammam emerged as the “hot spot” for property investment with a year-on-year increase in buying activity.

Residential sales in volume terms jumped 58 percent year-on-year to around 3,000 units, marking the highest level in recent years.

In value terms, Dammam recorded SAR3.2 billion of transactions, up 68 percent compared to the same period last year.

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