Arab News | Saudi housing deals rebound 9% in Q2: Knight Frank

RIYADH: Saudi Arabia’s residential property market rebounded in the second quarter of 2026, with transaction volumes rising 9 percent compared to the first three months of the year, according to Knight Frank. 

The Kingdom recorded 45,740 residential transactions over the quarter, while their total value increased 6 percent across the period to SR41.9 billion ($11.17 billion). 

This comes as the Saudi real estate market is projected to reach $101.62 billion by 2029, expanding at a compound annual rate of 8 percent from 2024. Saudi Arabia also introduced a framework in January allowing non-resident foreigners to own real estate. 

The housing market remains a key part of Saudi Arabia’s Vision 2030 agenda, with the government targeting a 70 percent homeownership rate among Saudi families by the end of the decade, up from 66.24 percent by the end of 2025. 

Amar Hussain, associate partner for research at Knight Frank, told Arab News that while the second quarter showed a modest rebound from the first three months of the year, affordability pressures and regional uncertainty continued to temper activity. 

“The headline figures reveal a market moving at two different speeds. Residential buyers are becoming more measured as affordability pressures and regional uncertainty influence confidence, while Riyadh’s office market remains exceptionally tight, with limited availability continuing to support rents,” Hussain said. 

On an annual basis, residential transaction volumes remained 12 percent below the second quarter of 2025, while their value was down 24.6 percent. 

Land activity 

Residential land accounted for 23,110 deals, or 50.5 percent of all residential transactions, with their value reaching SR21.7 billion, about 52 percent of the total. 

Riyadh recorded 10,667 residential transactions, up 23 percent quarter on quarter but down 2 percent annually. Apartment values increased 3.1 percent year on year to SR6,369 per sq. meter, while villa values declined 2.2 percent. 

Jeddah recorded 6,669 transactions, down 1 percent annually, while the Dammam Metropolitan Area saw volumes rise 21 percent to 3,896. 

Office demand 

Riyadh’s office market remained tight, with Grade A rents increasing 3.4 percent year on year to SR2,810 per sq. meter and Grade A occupancy reaching 97 percent. City-wide occupancy stood at 96 percent.  

Foreign investment activity also remained strong, with 9,018 foreign investment licenses issued during the quarter, up 252 percent year on year, providing a potential longer-term source of office demand. 

Hussain highlighted that the market’s next phase would depend increasingly on actual delivery rather than announced pipelines, with rising construction costs creating uncertainty around project timelines. 

Knight Frank expects Riyadh’s residential stock to increase from about 2.81 million units in 2026 to 3.30 million by 2030. Construction raw material costs have risen about 20 percent since the beginning of the year, potentially affecting development decisions and delivery schedules.