Saudi Arabia’s housing market is experiencing a notable geographic shift, with Dammam capturing increasing buyer attention as affordability pressures reshape demand across the Kingdom’s three major cities.
According to Cavendish Maxwell’s 2025 KSA Residential Real Estate performance report released on April 2, 2026, Dammam recorded a close to 30% increase in sales values to SAR10.7 billion, supported by more accessible pricing and steady economic activity in the Eastern Province.
“Dammam, where property is more affordable compared to other cities, was the standout performer and is poised for sustained growth supported by competitive pricing and robust economic activity in the region,” said Siraj Ahmed, Director and Head of Strategy and Consulting at Cavendish Maxwell.
The performance contrasts sharply with Riyadh, where residential transaction volumes fell 31% year-on-year despite the capital maintaining its position as the largest market by value with SAR96.2 billion in sales across 56,600 transactions. Average transaction values in Riyadh reached SAR1.7 million, reflecting higher property prices and elevated financing costs that have reduced purchasing power.
Jeddah delivered its strongest performance in years, recording 30,500 residential transactions with total sales of SAR36.6 billion. The average deal size stood at SAR1.2 million, reflecting steady end-user demand.
Recent policy interventions are expected to influence market dynamics through 2026 and beyond. A five-year rent freeze introduced in 2025 and adjustments to the White Land Tax aim to encourage development and improve affordability, particularly in Riyadh where supply constraints have been most acute.
“We expect a recalibration of the market as new supply, the 5-year rent freeze and White Land Tax reforms make property more competitively priced and lead to a recovery in market activity,” Ahmed noted.
New residential supply continues to enter the market, though delivery timelines remain fluid. Riyadh added 13,000 units in 2025, bringing total inventory to 1.93 million, with tens of thousands more planned through 2027. Jeddah’s pipeline is also expanding, while Dammam is set to add new stock over the same period.
The expansion in supply is further supported by the recent rise in White Land Tax, which encourages landowners to develop empty plots and accelerate delivery timelines. “The full impact of this reform will likely materialise through this year and beyond, with the gap between demand and supply gradually narrowing, in turn easing price pressure and enhancing affordability,” Ahmed said.
A new foreign ownership law introduced earlier in 2026 is expected to draw a broader investor base into the market. The framework allows non-Saudi buyers to acquire property in designated zones, marking a shift from earlier restrictions and opening the sector to additional capital.
Oil price swings and geopolitical developments remain key variables, though underlying demand drivers continue to hold. “External factors including oil market volatility and geopolitical tensions of course warrant close monitoring, but Saudi’s residential market remains well positioned, supported by strong demographic drivers, ongoing infrastructure investment and a continued commitment to Vision 2030,” Ahmed said.
The diverging performance across Saudi Arabia’s major cities mirrors patterns seen in neighboring markets, where off-plan sales momentum and buyer preferences for affordability continue to shape transaction activity across the Gulf region.