RIYADH: Saudi Arabia’s real estate prices rose 1.2 percent in the third quarter from a year earlier, as gains in residential land and apartment prices offset a steep decline in villa values, official data showed.

The increase comes as Saudi Arabia continues to promote homeownership and expand housing supply under its Vision 2030 economic diversification program, while affordability and financing conditions remain key factors shaping demand.

According to the General Authority for Statistics, residential property prices rose 2.3 percent year on year, driven by a 4.9 percent increase in residential land prices and gains of 1.7 percent in apartment prices and 0.8 percent in residential floor prices. Villa prices, however, fell 7.7 percent.

The overall property price index fell 1.2 percent quarter on quarter, despite rising annually, as residential prices declined 1.5 percent. Residential land prices led the quarterly drop, falling 2.1 percent, while apartment and villa prices slipped 0.5 percent and 0.4 percent, respectively. Residential floor prices, however, rose 1 percent, GASTAT said.

The mixed performance comes amid divergent trends across Gulf property markets. Dubai’s residential prices fell 4 percent year on year in September, while Abu Dhabi apartment and villa prices rose 9 percent and 8 percent, respectively, in the third quarter. Qatar’s real estate price index increased about 6.5 percent annually in August, while Oman’s overall property price index climbed 22.7 percent in the second quarter, led by residential land.

The homeownership rate reached 66.24 percent at the end of 2025, Minister of Municipalities and Housing Majed Al-Hogail said in July, according to the Saudi Press Agency.

“Property prices and percentage changes vary by location, so national figures do not reflect every neighbourhood,” said Amer Al-Zurayj, sales director at Holo.  

He said villa prices around Jadat Hittin and Al Malqa remained relatively stable, ranging from SR6 million ($1.59 million) to SR10 million. Land prices and offers also varied according to location and development potential, with developers continuing to seek suitable plots.  

Affordability and financing  

Changes in US Federal Reserve interest rates could influence Saudi mortgage costs through domestic interest rates, affecting purchasing power and demand for villas, Al-Zurayj said.

“Lower prices can improve affordability when financing costs and repayments remain manageable,” he said.  

“Buyers are also choosing more carefully, considering location, construction quality and whether the price reflects the property’s specifications,” he added.  

Saudi authorities are also seeking to expand housing supply by encouraging the development of unused land. In September, the Ministry of Municipalities and Housing said 29 million sq. metres of land in the Riyadh region had been developed, while another 21 million sq. metres remained under development as part of efforts linked to the undeveloped land and vacant property fees program.

Commercial property declines

Commercial real estate prices fell 2 percent year on year in the third quarter, with commercial land prices declining 2.1 percent, building prices down 1.4 percent and prices for exhibition spaces and shops falling 0.9 percent.

Agricultural property prices rose 3.9 percent, driven by an equivalent increase in agricultural land prices.

On a quarterly basis, commercial property prices declined 0.3 percent, while agricultural property prices increased 0.2 percent.

Regional differences

Northern Borders recorded the strongest annual increase in property prices among Saudi Arabia’s administrative regions, at 12 percent, followed by Riyadh at 4.6 percent and Madinah at 0.3 percent.

Asir posted the steepest decline, at 4.3 percent, followed by Hail at 3.8 percent, the Eastern Province at 3.7 percent and Al-Jouf at 2.8 percent.

GASTAT’s index measures changes in real estate transaction prices rather than rents and uses 2023 as its base year.