The landscape of Saudi Arabia’s residential real estate is undergoing a significant transformation. According to the Cavendish Maxwell 2025 KSA Residential Real Estate report, the market is beginning to diverge as buyers pivot away from the capital's high costs toward more accessible pricing in coastal cities, with Dammam emerging as a standout performer.
While Riyadh remains the nation's heavyweight in terms of total market value, shifting economic realities are driving a new wave of demand in the Eastern Province and the Red Sea coast.
Dammam: The New Frontier of Value
Dammam is rapidly gaining favor among homebuyers and investors seeking "relative value." The city’s residential sector saw a massive surge in 2025, with sales values climbing nearly 30% to reach SAR 10.7 billion.
Experts attribute this momentum to Dammam’s unique combination of accessible pricing and the steady economic engine of the Eastern Province.
"Dammam was the standout performer and is poised for sustained growth supported by competitive pricing and robust economic activity," said Siraj Ahmed, Director and Head of Strategy and Consulting at Cavendish Maxwell.
Jeddah’s Record-Breaking Year
While Dammam captures the budget-conscious, Jeddah is proving its resilience. The city recorded its strongest performance in recent memory, clocking 30,500 residential transactions in 2025.
- Total Sales Value: SAR 36.6 billion.
- Average Deal Size: SAR 1.2 million.
This steady demand from end-users suggests that Jeddah has found a "sweet spot" in the market, maintaining growth even as other regions experience volatility.
Riyadh: High Value, Declining Volume
The capital remains the largest residential market by sheer scale, accounting for SAR 96.2 billion in sales across 56,600 transactions. However, beneath these massive figures, signs of market strain are appearing.
Transaction volumes in Riyadh plummeted by 31% year-on-year, a decline largely blamed on "affordability constraints." With average transaction values sitting at a steep SAR 1.7 million, higher property prices and elevated financing costs are effectively pricing out a segment of the market.
"In Riyadh, affordability constraints and elevated financing costs led to a decline in purchasing power," Ahmed explained. Despite the dip, he noted that long-term demand remains supported by rapid urbanization and government housing initiatives.
Market Outlook for 2026
The divergence across these three major hubs reflects a maturing market where buyers are becoming increasingly price-sensitive.
- Dammam is expected to continue its upward trajectory as an affordable alternative.
- Jeddah is projected to maintain stable, resilient growth.
- Riyadh faces a period of adjustment where supply must meet the evolving financial realities of its growing population.
As the Kingdom continues its Vision 2030 reforms, the redistribution of demand across these cities highlights a more balanced and diversified national housing ecosystem.
