The slowdown observed in official indicators of the Saudi real estate market during the first six months of this year came as no surprise to observers, but rather as a practical application of the 'rebalancing' phase that began to take shape since 2025. With major regulatory changes such as 'real registration' coming into effect, investors and real estate developers are currently going through a period of recalculation and cautious anticipation, ahead of a second half that experts expect to be led by real demand in the residential and integrated logistics sectors.

In detail, data from the Real Estate Exchange under the Saudi Ministry of Justice (for property transfer category) showed that the total value of real estate transactions during the first half of 2026 fell to $21.9 billion (SAR 82.2 billion), compared to transactions worth $45.1 billion (SAR 169.4 billion) during the same period in 2025, representing a decline of 51.5 percent, the largest among indicators.

A road network in the Saudi capital (WAS)

This decline in values was also accompanied by a slowdown in the volume of transactions, as the number of real estate transactions dropped to 161,900 compared to 220,000 in the first half of the previous year, a decline of 26.4 percent, reflecting a clear slowdown in buying and selling activity within the market. The decline was not limited to transaction value and number, but extended to the volume of traded assets, as the number of traded properties decreased from 204,900 to 138,600, a decline of 32.4 percent, and the total traded area also fell to 1.625 billion square meters compared to 2.088 billion square meters in the first half of 2025, a decline of 22.2 percent.

In terms of prices, official data showed relative flexibility compared to transaction volume; the average price per square meter fell to SAR 1,965 compared to SAR 2,217 in the same period last year, recording a decline of 11.4 percent, while the highest recorded price per square meter in transactions fell from SAR 453,124 to SAR 330,578, a decline of about 27 percent.

An aerial view of Riyadh (Reuters)

Reading into the reasons for 'cautious anticipation'

In an attempt to explain this new dynamic, real estate expert and appraiser Engineer Ahmed Al-Faqih told Asharq Al-Awsat that this decline in the value and number of real estate transactions is 'very logical' given two critical factors that have emerged in recent months: first, regional geopolitical events represented by the US-Iran war, and second, the actual impact of government decisions aimed at rebalancing the market, which reflected quantitatively and qualitatively on transactions.

Al-Faqih called for distinguishing between traded and non-traded assets, noting that exchange indicators show many investors transferring their assets to the 'non-traded' category in a state of preferring to wait and reposition based on market developments.

As for other economic variables such as interest rates and financing costs, Al-Faqih described them as 'side factors' compared to the geopolitical and regulatory files. He added: 'The real estate investor, especially the speculator, is currently undergoing a serious recalculation, especially with the clear government direction to develop the sector and correct practices in it. This direction will contribute to redirecting massive liquidity and pumping it into real development projects, increasing housing supply.'

Decline in transactions is not a price correction

From a complementary perspective, expert and real estate enthusiast Abdullah Al-Mousa agreed with Asharq Al-Awsat that the decline in transaction values by more than 51 percent cannot be interpreted as a 'direct reflection of a similar decline in prices'; reading the indicators requires greater depth. Al-Mousa notes that the market witnessed a pivotal institutional shift during the first half of 2026, represented by the expansion of implementing 'real registration' and the transfer of real estate transactions in key areas - foremost among them the capital Riyadh - to the real estate register system, a fundamental variable that must be considered when making annual comparisons.

Al-Mousa cited the market's strength by noting that the average price per square meter fell by only 11 percent, compared to a drop in transactions by more than half their value, confirming that the sector did not experience a sharp price correction, but rather a change in the 'composition of the transactions themselves,' due to a decline in huge billion-dollar deals and high-value assets, while property prices in locations with real demand remained stable.

Accordingly, Al-Mousa asserts that the market is going through a 'resorting' phase and not a general price correction, as liquidity has become more selective, and investors' compass has turned towards high-quality assets with better investment viability.

One of the projects of the 'National Housing' (WAS)

The second half of 2026

Looking ahead to the near future, Al-Mousa expects the second half of 2026 to witness a gradual and qualitative improvement in real estate activity, ruling out a rapid return to the record trading levels of previous years. He explained that the sector is living through a transitional phase led by regulatory reforms, increased transparency, and the development of the legislative structure, factors that enhance investor confidence in the medium term, although they require some time to show their full effect.

In conclusion of his analysis, Al-Mousa suggested that integrated residential projects that meet real demand, along with the logistics and industrial sectors supported by economic growth and major projects, will lead the growth in the coming period. He concluded that the market's success in the next phase 'will be measured not only by the volume and quantity of transactions, but by its ability to attract quality investments, improve asset utilization efficiency, and achieve a sustainable balance between supply and demand.'