The Saudi real estate sector is entering an unprecedented growth phase, driven by strategic reforms, giga-scale projects, and a robust economic diversification strategy. According to CBRE Middle East’s Q3 2025 market review, the Kingdom is witnessing a significant evolution across multiple real estate segments.
Key Market Highlights
• Economic Growth: Saudi Arabia’s real GDP grew 3.9% year-on-year in Q2 2025, with annual forecasts revised upward to 4.2%. The non-oil sector now contributes 56% of total GDP, signaling a successful diversification strategy.
• Landmark Reforms: Three major policy interventions are set to reshape the market:
– New ownership law for non-Saudis (effective January 2026)
– Expanded white land tax targeting over 411 million square metres
– Five-year rent freeze in Riyadh to stabilize housing costs
• Office Market Dynamics: Riyadh’s Grade A offices are experiencing near-zero vacancy, with occupancy rates at 98% and rents rising 15% year-on-year. The King Abdullah Financial District is expanding to accommodate 40,000 daily visitors.
• Residential Sector: Transaction volumes grew 17.9% quarter-on-quarter, valued at SR7.7bn ($2.05bn). Apartment prices in Riyadh increased 6.3%, while villa prices rose 11.6%.
• Development Pipeline: Saudi Arabia boasts $440bn in committed projects and a potential $1.55tn in long-term investments, led by ambitious giga-developments like NEOM and Qiddiya City.
Tourism and Hospitality Boost
The hospitality sector saw remarkable growth, with 32 million visitors during the summer season and SAR53.2 billion ($14.19 billion) in spending—a 15% year-on-year increase. New local hospitality brands like Alia, Sama, and Noor are emerging, backed by the Public Investment Fund.
Expert Insight
Matthew Green, Head of Research at CBRE Middle East, noted: “Saudi Arabia’s real estate market is currently moving through a major transformation phase, amidst significant regulatory reforms and sustained strategic investments, creating a dynamic environment for investors, developers, and occupiers.”
With ambitious reforms and strategic investments, Saudi Arabia is positioning itself as a global real estate destination, attracting international attention and investment.
