December 2025
Saudi Arabia Real Estate Market: Overview, Outlook, and Opportunities
House Price Index
The Real Estate Price Index (REPI) has demonstrated a steady upward trend since 2014, increasing from a base level of 100 to 125 by the end of 2024. The average annual growth rate is approximately 2–2.5%, indicating a sustained appreciation in residential real estate prices. This reflects both organic demand and the impact of national mega-projects aimed at transforming urban development under Vision 2030.
Total Value of Real Estate Transactions
Over the past decade, the Saudi Arabian real estate market has demonstrated steady growth in monetary terms. From 2014 to 2023, the total value of transactions increased consistently from SAR 327 billion to SAR 550 billion. In 2024, a moderate correction was recorded to SAR 533 billion, reflecting a short-term cooling amid regulatory changes and asset repricing. Despite this, the volume remains historically high, confirming sustained interest in the market.
Full opening of the real estate market to foreign investors. Until 2026, foreigners were allowed to purchase property only in restricted zones and designated projects (such as Riyadh, Jeddah, Dammam, NEOM, Diriyah, and Medina Knowledge Economic City).
From 2026 onwards, foreign ownership will be permitted across residential, commercial, industrial, and agricultural real estate throughout the country, within zones approved by the executive government, rather than only in strictly defined investment areas.
The new legislation introduces broader opportunities:
📌 Foreign residents (living in Saudi Arabia) will be allowed to own one residential unit outside designated investment zones (not limited to special investment areas only).
📌 Non-residents and foreign companies will be allowed to acquire real estate in specially designated zones defined by the regulator.
📌 Commercial, industrial, and agricultural real estate will be accessible to foreigners across all cities without exception, unlike previous restrictions.
Despite liberalization, certain clear exceptions remain:
❗ In 2026, ownership will still be restricted or limited in specific areas:
The opening of the market is expected to trigger capital inflows from Asia, Europe, and the Middle East—investors who were previously restricted in property ownership rights in Saudi Arabia. The liberalization will also support the development of private demand, particularly in major urban centers and large-scale projects such as NEOM and Diriyah.
From 2026 onwards, foreign ownership will be permitted across residential, commercial, industrial, and agricultural real estate throughout the country, within zones approved by the executive government, rather than only in strictly defined investment areas.
The new legislation introduces broader opportunities:
📌 Foreign residents (living in Saudi Arabia) will be allowed to own one residential unit outside designated investment zones (not limited to special investment areas only).
📌 Non-residents and foreign companies will be allowed to acquire real estate in specially designated zones defined by the regulator.
📌 Commercial, industrial, and agricultural real estate will be accessible to foreigners across all cities without exception, unlike previous restrictions.
Despite liberalization, certain clear exceptions remain:
❗ In 2026, ownership will still be restricted or limited in specific areas:
- Mecca
- Medina
- Jeddah
- Riyadh
The opening of the market is expected to trigger capital inflows from Asia, Europe, and the Middle East—investors who were previously restricted in property ownership rights in Saudi Arabia. The liberalization will also support the development of private demand, particularly in major urban centers and large-scale projects such as NEOM and Diriyah.
Foreign Demand
The most active real estate buyers in Saudi Arabia are citizens of the UAE, Egypt, India, Pakistan, and the United Kingdom.
Price Per Square Meter
In Saudi Arabia, there is no significant price gap per square meter between the largest cities.
Rental Yield
At the same time, rental yields in Saudi Arabia remain relatively high, ranging from 6.4% to 8.4% in major cities.
Market Potential and Outlook
The opening of the market represents a major stimulus for the sector, as the Saudi Arabian real estate market has long been of interest to investors from the Middle East who were previously unable to directly register property ownership.
However, it is important to understand that these changes apply only to certain regions where foreigners were previously restricted from purchasing property. In areas where the market was already open, in essence, nothing changes.
Saudi Arabia is also showing several signs that may reduce its investment attractiveness. One of them is the freezing of rental rates in the capital, Riyadh. The increase in investment activity led to rising prices, which prompted centralized regulatory intervention, a potentially concerning signal for free-market dynamics.
Saudi Arabia is taking significant steps toward national transformation, but at the same time is applying mechanisms that are restrictive from a free-market perspective.
Additionally, the scale of The Line project, part of the NEOM mega-project, has been reduced. Originally planned as a 180-kilometer linear city, it has now been scaled down to only a few kilometers, while other parts of NEOM continue according to the original plan.
Therefore, only a subset of projects in Saudi Arabia currently represents genuine investment interest.
The share of foreign investment is expected to increase significantly in 2026–2027 due to the release of accumulated demand, after which it is likely to decline in 2028 and stabilize at a new equilibrium level.
The opening of the market represents a major stimulus for the sector, as the Saudi Arabian real estate market has long been of interest to investors from the Middle East who were previously unable to directly register property ownership.
However, it is important to understand that these changes apply only to certain regions where foreigners were previously restricted from purchasing property. In areas where the market was already open, in essence, nothing changes.
Saudi Arabia is also showing several signs that may reduce its investment attractiveness. One of them is the freezing of rental rates in the capital, Riyadh. The increase in investment activity led to rising prices, which prompted centralized regulatory intervention, a potentially concerning signal for free-market dynamics.
Saudi Arabia is taking significant steps toward national transformation, but at the same time is applying mechanisms that are restrictive from a free-market perspective.
Additionally, the scale of The Line project, part of the NEOM mega-project, has been reduced. Originally planned as a 180-kilometer linear city, it has now been scaled down to only a few kilometers, while other parts of NEOM continue according to the original plan.
Therefore, only a subset of projects in Saudi Arabia currently represents genuine investment interest.
The share of foreign investment is expected to increase significantly in 2026–2027 due to the release of accumulated demand, after which it is likely to decline in 2028 and stabilize at a new equilibrium level.