RIYADH – August 2025
Saudi Arabia’s real estate market continued its upward trend in Q2 2025, recording a 3.2% year-on-year increase in overall property prices, according to the General Authority for Statistics (GASTAT).
This steady growth highlights the sector’s vital role in achieving the goals of Vision 2030, as the Kingdom diversifies its economy beyond oil by expanding business hubs and tourism infrastructure.
🏢 Commercial Real Estate Surges by 11.7% YoY
The standout performer was commercial real estate, which posted an 11.7% annual increase in Q2 2025.
Key Commercial Highlights:
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Commercial land plots: +12.7%
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Commercial buildings: +2.7%
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Shops & galleries: +4.1%
Knight Frank reported that Grade A office rents in Riyadh soared by 23% YoY, hitting SR 2,700 ($720) per sq. meter in Q1 2025, driven by the government’s regional headquarters program, offering:
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30-year corporate tax exemptions
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Withholding tax waivers
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Support services for global firms
🏘️ Residential Sector Shows Slower Growth
Compared to commercial, the residential sector grew more modestly:
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Residential land: +0.2% YoY
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Villa prices: +3.2% YoY
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Residential floors: +1.5% YoY
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Apartments: –0.7% YoY
Quarter-over-quarter, the residential segment declined by 2.6%, attributed to:
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–4% drop in residential land prices
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–1.2% in apartment prices
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–0.9% in residential floors
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+1.8% increase in villa prices
📊 Quarterly Trends: Commercial Leads the Surge
In Q2 2025 vs Q1 2025, the overall real estate price index in Saudi Arabia rose 0.1%, driven by:
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+7.9% rise in commercial sector
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+8.6% in commercial land
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+3% in commercial buildings
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+1.7% rise in agricultural property prices
Despite growth, GASTAT noted a slight slowdown in the annual rate of change, from 4.3% in Q1 to 3.2% in Q2, due to residential sector cooling.
🌍 Vision 2030, Mega Projects, and the Road Ahead
Saudi Arabia’s Real Estate General Authority forecasts the market to reach $101.62 billion by 2029, with an 8% CAGR from 2024.
According to S&P Global, the Kingdom’s retail real estate sector is expected to boom, fueled by:
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Population growth
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Rising tourism
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Expansion of global brands
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Ongoing mega-projects like NEOM and Qiddiya
📍 Regional Real Estate Trends – Q2 2025 Highlights
| Region | YoY Price Change |
|---|---|
| Eastern Province | +4.2% |
| Makkah | +3.9% |
| Riyadh | +3.6% |
| Tabuk | +4.7% |
| Hail | +2.9% |
| Qassim | +1.1% |
| Asir | –3.9% |
| Madinah | –3.2% |
| Jazan | –2.8% |
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