Riyadh Real Estate Surges 63% to $17.5B in H1 2025 as Demand Soars

Riyadh, Saudi Arabia – September 24, 2025: Saudi Arabia’s capital city has experienced a record-breaking surge in residential real estate activity, with sales values climbing 63% year-on-year to USD 17.5 billion (SAR 65.7 billion) in the first half of 2025, according to the latest KSA Residential Real Estate Market Performance Report by Cavendish Maxwell.

Between January and June 2025, Riyadh recorded 35,600 residential transactions, marking a 10% increase compared to the same period in 2024. This reflects the city’s growing role as a magnet for both domestic and international investment, fueled by rapid population growth, economic diversification, and preparations for major global events such as Riyadh Expo 2030 and the FIFA World Cup 2034.

In Jeddah, Saudi Arabia’s commercial and cultural hub, residential sales also witnessed a strong performance. Total sales reached USD 4.9 billion (SAR 18.3 billion) for H1 2025, a 34% increase over last year. The number of transactions rose 25% to 15,200, underscoring the city’s continued appeal as an investment destination.

Population Growth Driving Demand

Saudi Arabia’s population is expected to exceed 38 million by the end of 2025, with more than a third of its residents living in Riyadh and Jeddah. Nearly half of the population are expatriates, which has created sustained demand for a wide range of housing options, from affordable apartments to luxury villas.

The government is working to achieve 70% home ownership among Saudi nationals by 2030, a key target of Vision 2030. Demand will likely grow even further when a new law allowing foreign ownership of real estate in designated zones comes into effect in January 2026, opening the market to international buyers and investors.

“The unprecedented growth of KSA’s residential sector reflects a deeper story: a region balancing tradition with modernity, where investment fuels progress while retaining the country’s charm and culture,” said Sean Heckford, Director of Built Asset Consulting at Cavendish Maxwell. “More than just a property trend, this is a catalyst for regional development, driving improvements in infrastructure, services and lifestyle.”

Prices and Rents Climb Across Riyadh and Jeddah

The report highlighted notable increases in both sales prices and rental rates in Riyadh and Jeddah during H1 2025.

In Riyadh, apartment prices rose 10.5% year-on-year, reaching an average of USD 1,600 (SAR 6,100) per square meter in June 2025. Villas saw even stronger growth, climbing 12.4% to an average of USD 1,439 (SAR 5,396) per square meter. This upward trend was mirrored in the rental market, with apartment rents up 10.3% and villa rents surging 14.4%. The launch of the Riyadh Metro has added further momentum, particularly for properties located near metro lines, which are attracting higher demand from both buyers and tenants.

Jeddah’s market showed more modest but steady growth. Apartment prices increased 1.8% year-on-year to USD 1,167 (SAR 4,376) per square meter, while villa prices rose 2.5% to USD 1,364 (SAR 5,114) per square meter. Apartment rental rates were up 4.7%, while villa rents saw a slight decline of 2.7%, reflecting local supply and demand adjustments.

Policy Reforms Shaping the Market

Heckford emphasized the impact of policy changes on the Kingdom’s real estate landscape.

“Policy reforms are transforming the Kingdom’s real estate landscape. Under the new foreign property ownership law, non-Saudis will be able to own property in designated areas, significantly broadening market access,” he said.

The reforms are designed to accelerate housing delivery and stabilize long-term price growth. The introduction of the White Land Tax and Vacant Property Tax aims to discourage speculative landholding, increase land availability, and promote more efficient urban development. These steps align closely with Vision 2030’s goals of boosting supply, improving affordability, and encouraging sustainable growth.

Expanding Supply: Thousands of New Units Underway

Residential supply is rapidly expanding to meet rising demand. Between January and June 2025, 8,100 new units were completed across Riyadh and Jeddah. By the end of the year, an additional 30,700 units are expected to be delivered, with a total of 72,000 units planned by 2027.

Riyadh will account for the bulk of this growth with 48,000 units, while Jeddah will see 24,000 new units added over the same period.

In H1 2025 alone, Riyadh delivered 6,000 new homes, and another 18,000 are expected in the second half of the year. By 2027, Riyadh’s total housing stock is projected to reach 1,995,000 units, up from 1,922,000 in June 2025. Major projects driving this expansion include Diriyah, New Murabba, and Sedra District, all of which are central to the city’s transformation.

Jeddah added 2,100 new units in H1 2025 and is set to deliver 12,700 more before the year ends, followed by an additional 24,000 units by 2027. This will increase Jeddah’s total residential stock from 1,092,000 units to 1,131,000 units by 2027. Key developments include Jeddah Central, Al Arous by ROSHN, and various government-led housing initiatives designed to improve urban living and expand access to modern residential communities.

Riyadh and Jeddah: Dual Engines of Growth

Riyadh and Jeddah are playing complementary roles in Saudi Arabia’s economic diversification strategy. Riyadh is firmly positioned as the Kingdom’s primary growth engine, supported by the government’s Regional Headquarters (RHQ) Program, which has successfully attracted multinational corporations to establish operations in the capital. This influx of international companies, combined with giga projects like New Murabba and Diriyah, is driving demand for housing and commercial space. With Expo 2030 on the horizon, Riyadh’s population is projected to exceed 12 million by 2035, creating long-term opportunities for the real estate sector.

“As KSA continues to diversify its economy and increase non-oil GDP, Riyadh and Jeddah – and their real estate sectors – will play increasingly pivotal roles in helping to realize the country’s vision,” Heckford added.

Meanwhile, Jeddah continues to evolve as Saudi Arabia’s commercial gateway, leveraging its strategic location on the Red Sea and rich cultural heritage. The city is undergoing ambitious urban and waterfront redevelopment projects that will support its projected population growth to over 6 million by 2035.

A Decade of Transformation

With robust demand, expanding supply, and sweeping policy reforms, Riyadh and Jeddah are at the forefront of Saudi Arabia’s real estate revolution. The combination of giga projects, foreign investment opportunities, and improved infrastructure is setting the stage for a decade of transformative growth.

As these cities continue to evolve, their property markets will not only meet the needs of a rapidly growing population but also position Saudi Arabia as a leading global destination for business, tourism, and modern urban living.