Riyadh Plans 57,000 New Homes as Residential Market Expands by 2027

Riyadh, Saudi Arabia: Riyadh’s residential market is entering a new phase of expansion, with 57,000 new housing units scheduled for delivery in 2026 and 2027, according to new research released by Cavendish Maxwell. The findings highlight sustained activity in Saudi Arabia’s capital despite growing affordability pressures and recent regulatory interventions.

Residential sales values in Riyadh reached $4.69 billion (SAR17.6 billion) during the third quarter of 2025, supported by approximately 13,000 transactions between July and September. This represented a 19 percent increase quarter-on-quarter, underlining continued demand even as prices remain elevated.

Riyadh Supply Pipeline Accelerates

The capital delivered around 10,000 new residential units during the first nine months of 2025, with a further 6,000 units expected in Q4, bringing total annual deliveries to approximately 16,000 homes by year-end. Looking ahead, Riyadh is set to remain the Kingdom’s most active residential market, with the bulk of future supply concentrated in the 2026–2027 pipeline.

By comparison, Jeddah is expected to deliver 36,000 units over the same two-year period, while Dammam is forecast to add 12,000 homes, reflecting the growing diversification of Saudi Arabia’s residential development landscape.

Regional Markets Show Diverging Trends

While Riyadh continues to dominate in absolute volumes, other major cities are recording notable shifts in market dynamics. Dammam, appearing for the first time in Cavendish Maxwell’s latest Saudi residential report, registered 3,000 transactions in Q3 2025, marking a 60 percent year-on-year increase and a 37 percent rise compared to Q2. Sales values in the Eastern Province city reached $850 million (SAR3.2 billion), the highest levels recorded in several years.

Jeddah also experienced quarterly growth, with 7,500 transactions completed in Q3, up 10 percent from the previous quarter. Sales values reached $2.31 billion (SAR8.7 billion), representing a 9 percent quarter-on-quarter increase.

However, on an annual basis, both Riyadh and Jeddah recorded declines in transaction volumes, down 44 percent and 19 percent, respectively, largely reflecting affordability constraints following sharp price appreciation in recent years.

Sales Prices And Rents Continue To Rise

According to the report, Q3 sales prices for both apartments and villas increased across all three cities, with Riyadh registering the strongest growth. Average apartment prices in the capital climbed to $1,642 (SAR6,160) per square metre, up 7.5 percent year-on-year, while villa prices rose 10.1 percent to $1,466 (SAR5,500) per square metre.

In Jeddah, apartment prices edged up 1.6 percent to $1,162 (SAR4,360) per square metre, while villa prices increased 3.1 percent to $1,370 (SAR5,140). Dammam recorded year-on-year price growth of 5.8 percent for apartments and 3.2 percent for villas, reinforcing its position as a comparatively affordable investment destination.

Rental markets also remained buoyant. Riyadh posted the steepest increases, with apartment rents rising 11.8 percent year-on-year and villa rents up 10.7 percent. Jeddah saw apartment rents increase 5.6 percent, although villa rents declined slightly by 2.1 percent. In Dammam, apartment rents rose 4.8 percent, while villa rents increased 2.2 percent.

Regulatory Shifts Reshape Market Outlook

Commenting on the findings, Sean Heckford, Director of Built Asset Consulting at Cavendish Maxwell, said: “Riyadh’s rapid price appreciation in 2024 led to sharp increases in both sales and rental prices, prompting the Government to introduce a five-year rent freeze to address affordability concerns. In Jeddah, price conditions have stabilised and affordability pressures have eased slightly. Meanwhile, Dammam, where property is more affordable, is emerging as a new hot spot for property investment, with a year-on-year surge in buying activity from both end-users and investors.”

New regulatory measures are expected to play a central role in shaping the market over the coming years. The foreign ownership law, set to take effect in January 2026, is anticipated to stimulate additional demand from international buyers, while reforms to the White Land Tax are designed to encourage landowners to develop or release idle plots into the market.

At the same time, Riyadh’s recently announced five-year residential rent freeze is likely to improve affordability for tenants, although it may also place short-term pressure on future supply by dampening investment incentives for landlords.

Outlook For 2026 And Beyond

Cavendish Maxwell’s report concludes that Saudi Arabia’s residential sector is entering a transitional phase, characterised by strong underlying demand, evolving regulations, and significant new supply. Across Riyadh, Jeddah, and Dammam, a combined 105,000 new homes are scheduled for delivery in 2026 and 2027, reinforcing the Kingdom’s broader housing and urban development objectives under Vision 2030.

“Despite affordability challenges in Riyadh, demand remains resilient,” Heckford added. “Jeddah demonstrates stability with balanced supply and demand dynamics, while Dammam stands out as a growth hotspot driven by affordability and investor interest. Infrastructure investment and policy reform will be critical in sustaining momentum and unlocking long-term opportunities across Saudi Arabia’s major residential markets.”