Property prices in Saudi Arabia decline for the first time in 4 years

SadaNews - Property prices in Saudi Arabia recorded a decline during the last quarter of last year for the first time in about 4 years, affected mainly by a drop in residential land prices, alongside a decrease in prices of villas and apartments, amid government measures aimed at stabilizing prices.

Data released by the General Authority for Statistics on Tuesday showed a 0.7% decline in property prices during the fourth quarter of 2025, marking the first annual decline since the first quarter of 2022, when the authority began updating its index methodology.

The residential sector led this decline with a 2.2% drop, the largest decrease since the new statistical series began. Residential lands, which make up about 45.8% of the overall index weight, were the main factor pressuring prices, after recording their largest drop since the first quarter of 2022. Prices of villas, apartments, and residential floors also decreased, deepening the decline in the housing index.

Riyadh records the first drop in property prices since 2022

Geographically, property prices in the Riyadh region declined by 3% during the fourth quarter of 2025, marking the first drop since the end of 2022. In contrast, price growth in the Makkah region accelerated to 2.5%, while the pace of price decline in Madinah slowed to 6.1%, compared to an 8.1% decrease in the previous quarter.

This performance reflects the impact of a bundle of government and regulatory measures adopted by Saudi Arabia over the past year, aimed at calming the rise in prices and restoring balance to the housing market after a strong upward trend in previous years. Among the most notable measures was lifting the suspension on selling, buying, and developing in four northern regions of Riyadh, covering a total area of 81.48 square kilometers, as part of a plan aimed at providing up to 40,000 plots of land annually for citizens over the next five years, at a price not exceeding 1500 riyals per square meter, contributing to increasing housing supply and alleviating price pressures.

Fees on white lands and freezing rent increases

Last year, Saudi Arabia also approved the application of flexible fees on white lands amounting to 10% annually instead of 2.5%, with vacant properties included for the first time, in a step aimed at stimulating development and reducing the holding of undeveloped lands. These fees apply to lands and buildings exceeding an area of 5,000 square meters.

In controlling the rental market, the Saudi Cabinet approved freezing any annual rent increases for five years within the capital Riyadh's jurisdiction, whether for existing or new contracts, aimed at curbing price fluctuations and enhancing the stability of the residential and commercial markets.

On the other hand, data showed that growth in commercial sector prices slowed to 3.6% during the fourth quarter, compared to 6.8% in the third quarter, affected by the slowdown in commercial land price growth, which is the largest component within the sector. Agricultural sector price growth also slowed slightly from 4.3% to 4.2% during the same period.

Quarterly performance

On a quarterly basis, property prices recorded their second quarterly decline, yet the pace of contraction slowed, with a 0.4% decline in the last quarter compared to a 1.1% drop in the third quarter. This decline was pressured by the residential sector, especially lands that continue to see their prices drop for the third consecutive quarter.