Official indicators from Saudi Arabia's real estate market showed a significant slowdown in the first half of 2026, reflecting a rebalancing phase that began in 2025. Major regulatory changes, including parcel-based real estate registration, have prompted investors and developers to reassess, with experts expecting a selective recovery led by residential projects and integrated logistics sectors in the second half of 2026.
Transaction Values Plunge by 51.5 Percent
Data from the Saudi Ministry of Justice’s Real Estate Market revealed that the total value of property transfers fell to $21.9 billion (SR82.2 billion) in the first half of 2026, compared to $45.1 billion (SR169.4 billion) in the same period of 2025 — a decline of 51.5 percent. The number of deals dropped to 161,900 from 220,000, a 26.4 percent decrease, while the number of traded properties fell to 138,600 from 204,900, down 32.4 percent. The total traded area also declined to 1.625 billion square meters from 2.088 billion square meters, a fall of 22.2 percent.
Prices Show Relative Resilience
Despite the sharp drop in transaction volumes, prices demonstrated relative resilience. The average price per square meter fell to SR1,965 from SR2,217 a year earlier, down 11.4 percent. The highest recorded price per square meter also decreased to SR330,578 from SR453,124, a decline of about 27 percent.
Experts Attribute Decline to Geopolitical and Regulatory Factors
Real estate expert and appraiser Ahmad Al-Faqih told Asharq Al-Awsat that the decline was “very logical” given two decisive developments: regional geopolitical events represented by the US-Iran war, and the actual impact of government decisions aimed at rebalancing the market. He emphasized that many investors have moved their assets into the “non-traded” category as they choose to wait and reposition themselves. Al-Faqih described interest rates and financing costs as “secondary factors” compared to geopolitical and regulatory files. “The real estate investor, especially the speculator, is now going through a serious reassessment phase, particularly with the government’s clear direction toward developing the sector and correcting its practices,” he said. “This approach will help redirect large liquidity flows into genuine development projects and increase housing supply.”
Market Undergoing 'Re-sorting' Rather Than Price Correction
Real estate expert Abdullah Al-Mousa agreed that the 51 percent fall in transaction values does not directly reflect an equivalent decline in prices. He noted that the expanded application of parcel-based registration and the transfer of real estate transactions in key areas — especially Riyadh — to the Real Estate Registry system represent a major institutional shift. Al-Mousa pointed to the market’s underlying resilience, stating that the 11 percent decline in average price per square meter compared to a drop of more than half in transaction values confirms the sector has not seen a sharp price correction. Instead, the composition of deals has changed, with fewer high-value transactions, while prices in locations with real demand have remained relatively stable. “The market is undergoing a phase of ‘re-sorting,’ rather than a broad price correction,” Al-Mousa remarked. “Liquidity has become more selective, and investors are increasingly turning toward high-quality assets with stronger investment feasibility.”
Selective Recovery Expected in H2 2026
Looking ahead, Al-Mousa expects the second half of 2026 to bring gradual, qualitative improvement in real estate activity, while ruling out a quick return to record transaction levels. He highlighted that integrated residential projects meeting actual demand, along with logistics and industrial sectors supported by economic growth, are likely to lead growth. “The market’s success in the next phase will not be measured only by transaction volume and quantity, but by its ability to attract quality investment, raise asset-use efficiency and achieve a sustainable balance between supply and demand,” Al-Mousa added.
