Saudi Arabia Real Estate Market: The 2026 Rotation in the Data

The Saudi Arabia real estate market swung from a 1.6% annual price decline in Q1 2026 to 1.3% growth in Q2 2026 on GASTAT's official index, in the same half-year that the value of property changing hands halved to SAR 82.2 billion (Ministry of Justice data, H1 2026). New residential mortgage lending, by contrast, fell only about 11.5% across 2025, to SAR 82.9 billion. Read together, those three series describe one event: speculative land trading is being taxed and priced out of the market, while financed end-user demand keeps setting prices for what still trades.

Everything below comes from primary sources (GASTAT, the Ministry of Justice, REGA, SAMA, government housing disclosures), each figure dated and linked. This page owns the national picture; for city depth, start with the Riyadh residential market.

Key figures at a glance

What the Saudi Arabia real estate market did in Q2 2026

GASTAT's Real Estate Price Index rose 1.3% year on year in Q2 2026, a 2.9-point reversal from the -1.6% print of Q1 2026, and gained 3.0% quarter on quarter (GASTAT REPI Q2 2026; Q1 2026 bulletin). One quarter flipped the direction of the national series.

The composition matters more than the headline. Residential, which carries 72.7% of the index weight, rose 2.6% year on year in Q2 2026, but the sub-components pulled in opposite directions: residential plots +6.3%, apartments +1.1%, residential floors +0.4%, and villas -9.7% (GASTAT). The villa decline deepened from -6.1% in Q1 (GASTAT) even as the aggregate turned positive. Commercial fell 3.2%. Agricultural land, a 1.9% weight, jumped 11.3%.

Regionally, the swing is sharpest where the policy pressure is: Riyadh printed +4.2% year on year in Q2 2026 after -4.4% in Q1, with Al Jouf the widest riser at +10.4% and Hail the widest decline at -10.1% (GASTAT, regional sheet).

Our read: this is a rotation print, not a recovery print. The product Saudi households borrow for (villas took 64% of bank mortgage value in 2025, per SAMA data below) is repricing down at near double digits, while the input for building your own house, the plot, is bidding up. Buyers have not left. They have changed product.

Deal values halved, and the index barely noticed

Ministry of Justice data puts H1 2026 transaction value at SAR 82.2 billion, down 51.5% from SAR 169.4 billion in H1 2025. Deal count fell less, 161,900 from 220,000 (-26.4%), and the average price paid fell to SAR 1,965 per sqm from SAR 2,217 (-11.4%) (MOJ via Arab News, Jul 2026).

Value falling twice as fast as volume means the market lost its largest tickets first. REGA's transaction data shows exactly which ones: land deals fell 55% year on year in Q1 2026 to 21,320, the lowest quarterly figure in a dataset reaching back to mid-2023, and land sale value fell 65% to SAR 20.71 billion. Villa transactions dropped 44% to just over 3,500; apartments proved most resilient, down 38% to 12,650 (REGA via AGBI, Jul 2026). Total homes sold in Q1 2026 came to 29,000, half the year-earlier figure (MOJ via AGBI, May 2026). Meanwhile building permits rose 28% year on year to 7,350 in April 2026, as buyers increasingly self-build rather than buy from developers (AGBI); that permit line is the demand-side twin of the +6.3% plot price print above.

One number here is routinely misread. The 11.4% fall in MOJ's average price per sqm gets quoted as a crash. It is mostly mix: strip out the vanished high-value land trades and the raw average drops even if nothing repriced. GASTAT's REPI, which is quality-adjusted through a Geo-AI model built with REGA, the Ministry of Justice and SAMA on a 2023 base (GASTAT methodology), shows residential prices up 2.6% over the same broad period. The two figures disagree because they measure different things, and the index is the better price signal.

Mortgage lending is the floor under this market

SAMA's tables show new residential mortgage lending by banks at SAR 80.4 billion in 2025, down 12% year on year, across 108,800 contracts, with the average new mortgage at SAR 739,000 (SAMA via Argaam, 3 Feb 2026). Add finance companies (SAR 2.49 billion, a seven-year low) and the combined 2025 total is SAR 82.9 billion against SAR 93.6 billion in 2024 (SAMA via Amlak).

Context makes that resilient rather than weak. Bank mortgage origination peaked at SAR 152.5 billion in 2021, collapsed to SAR 77.7 billion in 2023 as rates rose, then recovered to SAR 91.1 billion in 2024 (SAMA Monthly Statistical Bulletin, Nov 2025, Table 12f). A 12% dip in 2025, in a year when transaction values were beginning to halve, means the leveraged owner-occupier is now the marginal buyer of Saudi housing. The cash land trader has left; the salaried borrower has not. Villas still absorbed SAR 51.44 billion, 64% of bank mortgage value, in 2025 (SAMA via Amlak), even as villa prices fell. Households are financing the very product that is repricing, which is what a negotiating window looks like.

Rates are moving the right way for them. SAMA cut the repo rate from 5.00% in December 2024 (SPA, 18 Dec 2024) to 4.25% by 11 December 2025 (Saudi Gazette), and 3-month SAIBOR fell from a 6.02% average in 2024 to 4.97% in November 2025 (SAMA bulletin, Table 6). The funding architecture is deepening too: the Saudi Real Estate Refinance Company priced its third international sukuk at USD 2.75 billion in July 2026, 6.8 times oversubscribed, and doubled its programme to USD 10 billion (Arab News), after launching the Kingdom's first residential mortgage-backed securities in August 2025 (transaction size not disclosed) (Arab News). One honest caveat: the freshest retrievable SAMA bulletin runs to November 2025, so no verified 2026 lending print exists yet. The full origination series, rate mechanics and what they imply for affordability sit in our Saudi mortgage market analysis.

The policy stack: fees, a freeze and a new buyer pool

None of this is accidental: since mid-2025 the government has rebuilt incentives on both sides of the market, and the transaction data above is the intended result.

On supply, the amended White Land and Vacant Properties Fees Law replaced the old flat 2.5% levy with a four-tier annual fee: 10% of land value in the highest-priority development zones, then 7.5%, 5% and 2.5%, applying where an owner's aggregate holdings in a city reach 5,000 sqm (MOMAH; Amlak). Riyadh's first invoicing cycle opened 1 January 2026, and more than 60,000 landowners were billed (MOMAH via AGBI, 2 Jan 2026). By mid-June 2026, MOMAH counted 71 million sqm of previously idle Riyadh land in development or trading (MOMAH via Amlak, 17 Jun 2026). A companion fee of up to 5% now applies to buildings left vacant six months or more, under regulations approved 15 May 2026 (MOMAH via Saudi Gazette). Holding a prime Riyadh plot idle now costs up to a tenth of its value each year; REGA's 55% collapse in land deals is that arithmetic being priced in. The full rate schedule, legal timeline and city rollout are in our white land tax briefing.

On the demand side, Riyadh rents were frozen for five years from 25 September 2025, residential and commercial (King & Spalding, on the royal decree); see the rent freeze mechanics. Homeownership among Saudi families reached 66.24% at end-2025, from 47% in 2016, against a 70% Vision 2030 target (MOMAH via Saudi Gazette), with Sakani carrying more than 248,000 off-plan units and 580,000 bookings on-platform (MOMAH, Aug 2025). And a new buyer pool is being wired in: the opening of designated zones to foreign purchasers, which we cover separately in can foreigners buy property in Saudi Arabia.

Rents are still rising through all of it

While sale prices rotated, rents did not pause. GASTAT's CPI shows actual housing rents up 4.7% year on year in May 2026, with the housing group up 3.7% and contributing 0.7 percentage points of the 1.8% headline inflation rate, the single largest contributor (GASTAT via Arab News, Jun 2026). Underneath sits a population growing 4.7% a year to 35.3 million at mid-2024 (GASTAT). Households priced out of a halved transaction market do not disappear. They rent.

Omran yield-direction note. No allowed primary source publishes Saudi residential yield levels. Direction can still be stated: with national rents up 4.7% (CPI, May 2026) against apartment prices up 1.1% and villa prices down 9.7% (REPI, Q2 2026), implied gross yields on standing residential stock are widening, fastest in villas. This is a derived direction from two official indices, not a yield level.

The gaps in the national record, and our estimates

Four numbers a housing investment decision actually needs are published by no Saudi government body: city-level average transacted prices (MOJ publishes only the national SAR 1,965/sqm blend), a kingdom-wide unit supply pipeline, rental yield levels, and absorption, the rate at which new stock actually sells (see absorption rate explained). Private brokerage surveys fill those holes with unverifiable numbers; we prefer labelled estimates built from the primary record, per our methodology.

Omran estimate (REGA-derived): the average land deal is shrinking. REGA's Q1 2026 figures imply an average land transaction of SAR 20.71bn / 21,320 = roughly SAR 971,000. Reversing the published declines (-55% volume, -65% value) gives a Q1 2025 implied average near SAR 1.25 million (59.2bn / 47,400). The average land ticket therefore fell roughly 22% in a year: the fee regime is squeezing the large speculative parcels out of the trade faster than it cuts deal count.

The next four quarters turn on whether that taxed land converts into launched units fast enough for a mortgage-financed buyer pool that never left. We track the conversion project by project. Request the underlying national dataset or scope a briefing against your requirement.

FAQ

Is the Saudi Arabia real estate market growing or falling in 2026? Both, depending on the series. Official prices turned positive in Q2 2026 (REPI +1.3% year on year, residential +2.6%) after declines in Q1, but transaction values halved to SAR 82.2 billion in H1 2026 per Ministry of Justice data. Prices are holding on thin, rotating volume: plots and apartments up, villas down 9.7%.

Why did Saudi real estate transaction values fall by half? The collapse is concentrated in land. REGA data shows land deals down 55% and land value down 65% year on year in Q1 2026, after the white land fee (2.5% to 10% of land value annually) began invoicing in Riyadh on 1 January 2026. Deal count overall fell 26.4%, half the fall in value, meaning the largest speculative tickets exited first.

What is the average house price in Saudi Arabia? No official body publishes a national average house price. The Ministry of Justice's national average across all traded property was SAR 1,965 per sqm in H1 2026 (down 11.4% year on year), but that blends land, homes and commercial property. SAMA's average new mortgage of SAR 739,000 in 2025 is the better proxy for what a financed home purchase costs.

What is Saudi Arabia's homeownership rate? 66.24% of Saudi families at end-2025, per the Housing Minister, up from 47% in 2016 and short of the 70% Vision 2030 target. The remaining gap is what the mortgage subsidies, Sakani supply and land fees serve.

What is the white land tax? An annual fee on undeveloped urban land, amended in 2025 from a flat 2.5% to four tiers of 2.5%, 5%, 7.5% and 10% of land value by development priority, applying to owners holding 5,000 sqm or more in a city. Riyadh billing started 1 January 2026 with over 60,000 invoices; Makkah, Jeddah and the Dammam area follow in phase two.

What is the Saudi Real Estate Price Index (REPI)? GASTAT's quarterly official price index, rebuilt on a 2023 base with a Geo-AI methodology developed with REGA, the Ministry of Justice and SAMA, published under the new method since Q3 2024. It is quality-adjusted, which is why it can rise while raw transaction averages fall.

Sources

• GASTAT, Real Estate Price Index Q2 2026 (national +1.3%, residential detail, regions): link
• GASTAT, Real Estate Price Index Q1 2026 bulletin (-1.6% YoY, methodology): link
• Ministry of Justice H1 2026 transaction data, via Arab News: link
• REGA Q1 2026 land/villa/apartment transactions, via AGBI: link
• MOJ Q1 2026 home sales, via AGBI: link
• SAMA FY2025 mortgage lending (combined SAR 82.9bn), via Amlak Newspaper: link
• SAMA FY2025 bank mortgages (SAR 80.4bn, 108,800 contracts), via Argaam: link
• SAMA Monthly Statistical Bulletin, Nov 2025 (Tables 12f, 6): link
• SPA, SAMA repo cut to 5.00% (18 Dec 2024): link
• Saudi Gazette, SAMA repo cut to 4.25% (11 Dec 2025): link
• SRC third international sukuk (USD 2.75bn, Jul 2026), via Arab News: link
• SRC first Saudi RMBS (Aug 2025), via Arab News: link
• MOMAH homeownership 66.24% end-2025, via Saudi Gazette: link
• MOMAH, Riyadh white land fee tiers and 1 Jan 2026 invoicing: link
• White land fee tier schedule, via Amlak Newspaper: link
• MOMAH Riyadh white-land impact (71M sqm), via Amlak Newspaper: link
• MOMAH 60,000+ Riyadh invoices, via AGBI: link
• MOMAH vacant property fee regulations (up to 5%), via Saudi Gazette: link
• King & Spalding, Riyadh five-year rent freeze (25 Sep 2025 decree): link
• GASTAT CPI May 2026 (rents +4.7%), via Arab News: link
• GASTAT, Population Estimates 2024 (35.3M): link
• MOMAH, Sakani platform statistics (248,000+ off-plan units): link