Dammam has emerged as the standout performer in Saudi Arabia’s residential real estate sector during the first quarter of 2026, with quarterly sales values surging 71 percent to SAR3.6 billion ($957 million), according to new data from Cavendish Maxwell.
Around 2,900 homes changed hands in Dammam from January to March this year, marking a 41 percent increase on the previous quarter, when sales values stood at SAR2.1 billion. Compared to the same period in 2025, sales volumes in the Eastern Province city rose 25 percent, with transaction values up 48 percent.
March 2026 delivered the strongest monthly performance, with 1,265 transactions recorded despite ongoing regional tensions—a sign of the housing sector’s resilience in Dammam.
“While the potential implications of the regional geopolitical situation remain closely monitored by market participants, it is still too early to draw definitive conclusions,” said Kevin Duffield, Director of Built Asset Consulting at Cavendish Maxwell. “Saudi Arabia’s residential market remains supported by strong domestic demand, with a predominantly local buyer base providing a degree of resilience against short-term external shocks.”
Riyadh and Jeddah show mixed performance
Riyadh posted a quarterly rise in transaction volumes and values, with 8,800 sales worth SAR13.4 billion in Q1 2026—an increase of nearly 12 percent in volume and more than 4 percent in value against the final quarter of 2025.
However, the capital’s year-on-year figures tell a different story. Sales volumes dropped 64 percent compared to Q1 2025, with values down 72 percent, reflecting a normalization following elevated activity in late 2024 and early 2025. Higher financing costs, affordability constraints, Ramadan, Eid, and regional uncertainty also weighed on Riyadh’s Q1 performance.
Jeddah saw activity moderate further, with sales declining 25 percent compared to Q4 2025 and around 30 percent year-on-year. Investors spent SAR7.2 billion across 5,800 transactions in the first three months of the year.
Prices and rents stabilizing across major cities
While real estate sales prices and rental rates across Riyadh, Jeddah, and Dammam increased year-on-year, the pace of growth is beginning to moderate, with little or no change compared to the fourth quarter of 2025.
In Riyadh, apartment sales prices averaged SAR6,200 per square meter in Q1, up 3.7 percent year-on-year, while villas climbed nearly 7 percent to SAR5,700 per square meter. Prices for both property types remained broadly flat quarter-on-quarter.
In Jeddah, the cost of apartments rose nearly 2 percent year-on-year and 1.3 percent quarter-on-quarter to SAR4,400 per square meter, with villa prices reaching SAR5,200 per square meter. In Dammam, apartment prices increased 4 percent annually, with villas up more than 2 percent, though both remained stable compared to Q4 2025.
Rental rates also rose compared to a year ago but moderated in Q1 relative to the previous quarter. In Riyadh, apartment rents increased nearly 6 percent and villas more than 5 percent year-on-year, but declined 2.8 percent and 1.2 percent respectively quarter-on-quarter—partly due to the rent freeze introduced in September and new residential supply entering the market.
In Jeddah, apartment rents were up 2.7 percent and villas nearly 1 percent compared to Q1 2025, with a softening against the previous quarter. In Dammam, rents rose 3.2 percent year-on-year for apartments and 2.1 percent for villas.
Major supply pipeline ahead for Riyadh
Riyadh delivered almost 3,000 new residential units in Q1 this year, bringing the capital’s residential stock to around 1.94 million. Another 31,000 units are due to come to market by the end of the year, with an additional 61,500 by the end of 2028, by which time Riyadh’s total residential inventory will reach 2.03 million.
Jeddah now has around 1.1 million units following the delivery of 1,500 new homes in Q1. With 17,500 more in the pipeline this year and nearly 46,000 over the next two years, Jeddah’s residential stock is set to exceed 1.16 million by 2028.
In Dammam, 4,800 new homes are expected to be delivered in 2026, bringing the city’s inventory to 435,000. Handovers will accelerate in 2027, when 10,600 units are scheduled for completion, with another 3,500 slated for 2028.
“Development pipelines are evolving across each city, with Riyadh seeing the most new supply in the medium term, and growth in Jeddah and Dammam more modest and measured,” said Duffield. “Collectively, this expanding pipeline is expected to play an increasing role in shaping market dynamics and gradually improving the balance between supply and demand.”
Foreign ownership framework brings new opportunities
Saudi Arabia’s new foreign ownership law, introduced in January 2026, now allows non-Saudi individuals and companies to invest in the country’s real estate market.
“Recently approved geographical zones in which the new rules apply bring greater clarity on where investors can buy,” Duffield noted. “The long-term impact on sales numbers and pricing will depend on the level of non-Saudi demand, the types of projects located within the designated areas, and how quickly the supporting regulatory framework is implemented over the next few years.”
In Riyadh, designated locations for foreign ownership include new urban developments such as Qiddiya, New Murabba, and King Abdullah Financial District, while Jeddah has more than 55 zones open to non-Saudi investors. Several other giga-projects and Special Economic Zones, including NEOM, The Red Sea Project, Amaala, AlUla, and King Abdullah Economic City, also fall within the approved framework.
“Overall, while short-term market activity is expected to remain influenced by affordability constraints, financing conditions, and external uncertainty, the medium-term outlook for Saudi Arabia’s residential sector remains supported by population growth, sustained government investment, and ongoing economic diversification,” Duffield added.
