Real estate prices in Saudi Arabia’s capital fell 3% in the final quarter of last year, reversing a 1% rise in the previous quarter, in a shift that highlights the on-the-ground impact of policy moves ordered by Prince Mohammed bin Salman bin Abdulaziz, Crown Prince and Prime Minister, to rein in soaring property costs across the Kingdom, particularly in Riyadh.
According to an index issued by the General Authority for Statistics on Tuesday, the real estate price index in Saudi Arabia fell 0.7% in the fourth quarter of last year compared with the same period of 2024.
The decline was driven mainly by weaker performance in the residential sector, which carries the most significant weight in the index, as its annual rate of change fell 2.2%.
The commercial sector continued to see a slight slowdown in growth momentum, while maintaining positive annual growth of 3.6%.
A real balance
Real estate specialists told Asharq Al-Awsat that the Crown Prince’s directives have become evident on the ground after property prices in Riyadh surged to unprecedented levels, prompting government intervention to curb the increases and enable citizens to own their first homes without excessive financial burdens.
Real estate analyst Khaled Al-Mobid said the 0.7 % decline in the real estate price index in the fourth quarter of 2025 reflects the market’s entry into a phase of real balance after years of rapid price increases, describing it as a healthy indicator that supports, rather than weakens, market sustainability.
“What we are witnessing today is not a loss in value, but a logical price correction, particularly in the residential sector, due to increased supply, improved regulation, and greater awareness among market participants, whether buyers or investors,” Al-Mobid told Asharq Al-Awsat.
He added that this balance creates better opportunities for end users, redirects investment toward appropriate products at fair prices, and curbs short-term speculation, serving the real estate economy over the medium and long term.
Housing stability
Real estate specialist Ahmed Omar Basudan told Asharq Al-Awsat that the sector has seen declines in many regions of the Kingdom, as buyers await the effects of government decisions issued under the Crown Prince’s direction.
He cited recent measures, including the announcement of the names of beneficiaries of subsidized land grants in northern Riyadh, located in some of the area’s best neighborhoods.
Basudan said the decision to fix residential rental prices in Riyadh for five years also contributed to the decline in the capital’s real estate market, as tenants are experiencing a period of housing stability, reducing demand for purchases at this stage.
He added that recent amendments to fees on undeveloped land and vacant properties, which have been implemented and are now being collected, also played a role, prompting landowners to move quickly to sell some plots at competitive prices to avoid bearing those fees.
Data from the General Authority for Statistics showed that residential real estate prices fell in the fourth quarter of last year compared with the same quarter of 2024, with the sector declining 2.2%. The drop was driven by a 2.4% fall in residential land prices, a 2.5% decline in apartment prices, a 1.3% decrease in villa prices, and a 0.2% drop in residential floor prices.
Quarterly comparison
The real estate price index fell 0.4% in the fourth quarter of last year, at a slower pace than in the third quarter.
The index was affected by a 0.4% decline in the residential sector, driven by a 0.7% drop in residential land prices, a 0.4% fall in apartment prices, and a 0.2% decrease in residential floor prices, while villa prices rose 0.8%.
At the regional level, the annual real estate price index fell 0.7% nationwide in the fourth quarter of last year, with Riyadh recording a 3% decline, compared with a 1% increase in the third quarter.
The Eastern Province posted the highest real estate price increase at 4%, followed by Makkah at 2.5%, Tabuk and Jazan at 1.1% each, and Al-Jawf at 0.4%.
By contrast, Hail, the Northern Borders region, and Madinah recorded the steepest declines, at 8.9%, 6.8%, and 6.1%, respectively.
