Report

Saudi Arabia Residential Real Estate Market Analysis

Saudi Arabia residential real estate market size in 2026 is estimated at USD 164.85 billion, growing from 2025 value of USD 154.61 billion with 2031 projections showing USD 227.12 billion, growing at 6.62% CAGR over 2026-2031. Continued government funding under Vision 2030, strong population growth, and rising mortgage liquidity are widening demand-supply gaps and propelling new deliveries. Sales remain the dominant route to homeownership, yet a deepening rental culture is reshaping unit mix, amenities, and lease lengths. Apartments capture the biggest slice of new builds as land in major cities tightens, while affordable housing outperforms on the back of subsidies, lower down-payments, and fast-track approvals. Execution capacity is improving: contract awards for real-estate projects rose 8% year-over-year in H1 2024, and total construction spending reached USD 49.3 billion, underscoring robust pipeline momentum.

Saudi Arabia Residential Real Estate Market Trends and Insights



Government-Backed Housing Initiatives Under Vision 2030 Improving Homeownership Access

Government-backed housing initiatives under Vision 2030 are transforming homeownership opportunities in Saudi Arabia, making it more accessible for citizens. As part of Vision 2030, the government targets a 70% homeownership rate by reducing down-payments to 5% and enhancing mortgage liquidity through securitization. The National Housing Company signed a USD 665 million agreement with China State Construction Engineering to deliver 20,000 housing units, showcasing strong execution capabilities and fostering international collaboration. Additionally, the Saudi Real Estate Refinance Company's USD 906 million portfolio acquisition from Saudi National Bank marked the Kingdom's largest secondary-market transaction, reinforcing investor confidence. Land-release programs and escrow-protected off-plan regulations further support these financing reforms, collectively expanding access to Saudi Arabia's residential real estate market.

Persistent Housing Shortage Sustaining Demand for New Residential Projects

The housing market in Saudi Arabia is grappling with a significant supply-demand imbalance, creating opportunities for new residential developments. Saudi Arabia is projected to require over 800,000 additional homes by 2030, maintaining strong demand across all price segments. However, the planned addition of 300,000 units by 2025 is insufficient to meet the annual household formation rate, particularly in Riyadh, where government hiring is concentrated. This shortfall is most pronounced among mid-income households, driving robust presales even during early construction phases. The Real Estate General Authority is actively ensuring quality compliance and encouraging developers to address underserved areas. These persistent deficits are expected to support long-term stability in the Saudi residential real estate market.

High Construction Costs Driven by Material Price Volatility and Labor Shortages

The construction industry in Saudi Arabia is grappling with escalating costs, driven by material price volatility and labor shortages. In the first half of 2024, cement consumption reached 22.6 million tons, with prices ranging from USD 58.5 to 63.9 per ton, significantly impacting project budgets. Giga-projects exceeding USD 850 billion in value are monopolizing materials and skilled labor, causing delays. Developers in remote areas face higher freight costs, further challenging affordable housing projects. Although local manufacturing is expanding, it will take years to meet demand. Stockpiling and hedging strategies are increasing carrying costs, compressing margins in the Saudi Arabian residential real estate market.

Other drivers and restraints analyzed in the detailed report include:

Expanding Young Population and Rising Household Formation Boosting Residential DemandLarge-Scale Urban Development and Infrastructure Projects Creating New Residential HubsEconomic Dependence on Oil Prices Impacting Consumer Affordability and Investor Confidence

For complete list of drivers and restraints, kindly check the Table Of Contents.

Segment Analysis

Sales captured 63.95% of the Saudi Arabia residential real estate market in 2025, reflecting a cultural preference for ownership backed by subsidized mortgages and ample government land grants. Primary transactions often involve off-plan commitments secured through escrow structures that protect buyers and release funds in stages, reinforcing confidence. Developers such as ROSHN have embraced virtual showrooms and instant mortgage approvals to accelerate bookings for large master-planned districts. Meanwhile, the rental channel is forecast to grow at a 7.11% CAGR to 2031, powered by expatriate mobility and the demands of younger Saudis seeking flexible housing near new business districts. Leasing platforms such as Ejari are digitalizing contract issuance and rent collection, increasing transparency and professional management standards across the Saudi Arabia residential real estate market.

Rental growth clusters around Riyadh's King Abdullah Financial District and the Dammam corridor, where petrochemical employers attract transient engineers. Institutional landlords are emerging; for instance, Sedco Capital is assembling a diversified multifamily portfolio, signaling gradual maturation toward an investable rental asset class. Technology tie-ups-ROSHN's IoT collaboration with Cisco-support smart-home features that command rental premiums. Sales will continue to dominate value, yet rentals provide a safety valve during economic cycles and complement life-stage housing choices, enriching the overall Saudi Arabia residential real estate market structure.

Apartments and condominiums secured 52.05% of revenue in 2025 and led growth with a 7.29% CAGR through 2031, underscoring their primacy in land-constrained metros. The segment excels at delivering scale: multi-story blocks in SEDRA, MARAFY, and ALDANAH yield cost efficiencies that hasten delivery schedules and align with Vision 2030 affordability objectives. Developers increasingly bundle co-working lounges, on-site childcare, and rooftop recreation into apartment complexes, matching evolving lifestyle expectations. Villas still attract extended families, yet escalating plot costs and utility bills are narrowing the affordability gap, steering middle-income buyers toward vertical living.

Demand tailwinds are pronounced in the Saudi Arabia residential real estate market size for apartments, where integrated transit links shorten commutes and align with government sustainability targets. Digital permitting, along with modular construction, is helping domestic firms like Dar Al Arkan trim build cycles by up to 15%. Foreign partners contribute facade engineering, facade cleaning robotics, and energy-efficient glazing systems, broadening unit appeal. With more than 70,000 apartment keys scheduled for handover across major cities by 2027, the segment will remain the centerpiece of new urban development.

The Saudi Arabia Residential Real Estate Market Report is Segmented by Business Model (Sales and Rental), by Property Type (Apartments & Condominiums and Villas & Landed Houses), by Price Band (Affordable, Mid-Market, and Luxury), by Mode of Sale (Primary (New-Build), and Secondary (Existing-Home Resale)), and by City (Riyadh, Jeddah, DMA and the Rest of Saudi Arabia). The Market Forecasts are Provided in Terms of Value (USD).

List of Companies Covered in this Report:

Roshn Dar Al Arkan Saudi Real Estate Co (Alaqaria) Jabal Omar Development Co Emaar Middle East Sumou Real Estate Retal Urban Devt Cayan Group Nesma & Partners Umm Al Qura Devt Al Akaria HanMi Alinma Investment Alargan Projects Red Sea Global (residential zones) Al Saedan Real Estate Tamimi Group Real-Estate Maskan Arabia Thabat Real Estate Injaz Development Mohammed Al-Habib RE

Additional Benefits:

The market estimate (ME) sheet in Excel format
3 months of analyst support