Dammam Leads Saudi Residential Growth as Q1 Sales Reach $960 Million

RIYADH, SAUDI ARABIA – Dammam recorded the strongest growth in Saudi Arabia's residential property market during the first quarter of 2026, with sales values rising 71% quarter-on-quarter to $960 million (SAR3.6 billion), according to the latest residential market analysis by Cavendish Maxwell.

Approximately 2,900 homes were sold in Dammam between January and March, representing a 41% increase compared with the fourth quarter of 2025, when sales totalled $560 million (SAR2.1 billion). Compared with the first quarter of 2025, transaction volumes increased 25%, while sales values climbed 48%.

Despite ongoing regional geopolitical tensions, March 2026 recorded the city's strongest monthly performance with 1,265 residential transactions, highlighting the resilience of Dammam's housing market.

Riyadh and Jeddah Activity Moderates

Cavendish Maxwell's report also recorded continued activity in Riyadh, where 8,800 residential transactions worth $3.57 billion (SAR13.4 billion) were completed during the first quarter, representing quarterly increases of nearly 12% in transaction volumes and more than 4% in transaction values.

On an annual basis, however, Riyadh's sales volumes declined 64%, while transaction values fell 72% compared with the exceptionally strong market recorded in the first quarter of 2025. According to the report, higher financing costs, affordability pressures, Ramadan, Eid and regional uncertainty all contributed to the moderation.

Jeddah also experienced softer market activity, with approximately 5,800 transactions valued at $1.92 billion (SAR7.2 billion) during the quarter. Sales volumes declined 25% compared with the previous quarter and around 30% year-on-year.

Prices and Rental Growth Moderate

The report found that residential sales prices and rental rates across Riyadh, Jeddah and Dammam continued to increase on an annual basis, although the pace of growth moderated compared with previous quarters.

In Riyadh, apartment prices averaged SAR6,200 per square metre, rising 3.7% year-on-year, while villa prices increased nearly 7% to SAR5,700 per square metre. Prices remained broadly unchanged from the previous quarter.

Jeddah apartment prices reached SAR4,400 per square metre, increasing nearly 2% year-on-year and 1.3% quarter-on-quarter. Villa prices climbed 3.3% annually and 1% quarterly to SAR5,200 per square metre.

In Dammam, apartment prices rose 4% year-on-year, while villa prices increased by more than 2%, with little change from the fourth quarter of 2025.

Rental rates also continued to rise annually across the three cities, although quarterly growth softened. In Riyadh, apartment rents increased nearly 6% and villa rents more than 5% compared with a year earlier. However, following the rent freeze introduced last September and additional residential supply, apartment rents declined 2.8% and villa rents 1.2% from the previous quarter.

Jeddah recorded annual rental growth of 2.7% for apartments and nearly 1% for villas, while apartment rents in Dammam increased 3.2% and villa rents 2.1% year-on-year.

Kevin Duffield, Director of Built Asset Consulting at Cavendish Maxwell, said:

“While the potential implications of the regional geopolitical situation remain closely monitored by market participants, it is still too early to draw definitive conclusions. A clearer assessment will emerge as market performance is evaluated over a longer period. Saudi Arabia's residential market remains supported by strong domestic demand, with a predominantly local buyer base providing a degree of resilience against short-term external shocks.

“Development pipelines are evolving across each city, with Riyadh seeing the most new supply in the medium term, and growth in Jeddah and Dammam more modest and measured. Collectively, this expanding pipeline is expected to play an increasing role in shaping market dynamics and gradually improving the balance between supply and demand.

“Overall, while short-term market activity is expected to remain influenced by affordability constraints, financing conditions and external uncertainty, the medium-term outlook for Saudi Arabia’s residential sector remains supported by population growth, sustained government investment, and ongoing economic diversification.”

Residential Supply Continues to Expand

Riyadh added almost 3,000 residential units during the first quarter, increasing total housing inventory to approximately 1.94 million units. A further 31,000 homes are expected to be completed by the end of 2026, with another 61,500 units scheduled by the end of 2028, taking total inventory to around 2.03 million homes.

Jeddah delivered 1,500 new homes during the quarter, bringing total residential stock to approximately 1.1 million units. The city is expected to receive another 17,500 homes this year and nearly 46,000 more by the end of 2028.

In Dammam, approximately 4,800 homes are due for delivery during 2026, increasing residential inventory to 435,000 units. A further 10,600 homes are scheduled for completion in 2027, followed by another 3,500 units in 2028.

Foreign Ownership Framework

The report also highlighted Saudi Arabia's new foreign ownership law, introduced in January 2026, which allows non-Saudi individuals and companies to invest in the Kingdom's real estate market.

Kevin Duffield said:

“Recently approved geographical zones in which the new rules apply bring greater clarity on where investors can buy. The long-term impact on sales numbers and pricing will depend on the level of non-Saudi demand, the types of projects located within the designated areas, and how quickly the supporting regulatory framework is implemented over the next few years.”

Eligible investment locations in Riyadh include Qiddiya, New Murabba and the King Abdullah Financial District, while more than 55 designated zones in Jeddah are now open to foreign ownership. Several giga-projects and Special Economic Zones, including NEOM, The Red Sea Project, Amaala, AlUla and King Abdullah Economic City, also fall within the approved framework. Separate ownership regulations continue to apply in the holy cities of Makkah and Madinah, where designated ownership zones remain restricted to Muslim buyers.