Residential sector prices in Riyadh declined by 5.1% in the second quarter of this year compared to the same quarter last year, while villa prices fell by 13.4% over the same period, according to special statistics from the Real Estate Authority obtained by Al-Eqtisadiah.

This development reflects the impact of real estate balance decisions in the capital's sector and the continued pace of decline since their implementation last year.

According to the data, land prices fell by 5.1% in the second quarter of this year compared to the same period last year, while residential apartments saw a slight increase of 0.6%.

A more detailed reading by the Real Estate Authority of the movement of residential products.

The General Authority for Statistics had published data today showing a 1.3% annual increase in the real estate price index in Saudi Arabia during the second quarter of this year, after recording a decline for two quarters.

Mon, 20 2026

The data attributed the rise to a 2.6% growth in residential sector prices, in addition to an 11.3% increase in agricultural sector prices, while commercial sector prices fell by 3.2%.

The rise in the general real estate price index at the Saudi level, issued by the General Authority for Statistics, reflects a comprehensive reading that includes residential, commercial, and agricultural properties. In contrast, the Real Estate Authority's indices and SMC reports provide a more detailed reading of the movement of residential products at the city level.

The rise in the general index does not mean the end of the correction phase.

The General Authority for Real Estate told Al-Eqtisadiah, in its comment on the data issued by the Statistics Authority, that the rise in the general index at the Saudi level does not necessarily mean the end of the correction phase in the residential market in Riyadh, as detailed indicators still show a decline in villa and residential land prices, compared to relative stability in apartment prices, reflecting the difference in local market dynamics from the general trend of the national index.

Part of the difference is due to the nature of the components measured by each index. The index issued by the General Authority for Statistics measures the performance of the real estate market across various sectors, including residential, commercial, and agricultural properties, while the Real Estate Authority's indices and SMC reports are limited to the residential sector.

Sun, 19 2026

The Real Estate Authority added, "Therefore, the general index at the Saudi level may rise due to an increase in some of its components, even with a decline in some residential products."

The General Authority for Statistics' index measures the performance of the real estate market at the Saudi level, while the Real Estate Authority issues city-level indices, and SMC reports focus on Riyadh. Accordingly, price movements in a particular city may differ from the general trend of Saudi Arabia, due to the varying performance of local markets between regions.

During last May, new residential mortgage lending for individuals in Saudi Arabia declined by 41% year-on-year, reaching 4.4 billion riyals, indicating continued pressure on the pace of housing finance with rising interest rates and slowing demand for some real estate products.

Villas are more sensitive to interest rates and purchasing power.

The decline was driven by a decrease in financing for various residential products. Villa financing recorded a 45% year-on-year decline, reaching 2.8 billion riyals, yet still accounted for the largest share of total residential mortgage lending during the month at 63%.

Tue, 30 2026

This highlights that demand for villas, which are the most expensive among residential products, is more sensitive to interest rates and individuals' purchasing power levels.

Last March, Saudi Crown Prince Mohammed bin Salman directed 5 measures to achieve balance in the real estate sector, against the backdrop of the rise in land prices and rents in Riyadh in recent years.

These included lifting the suspension on selling, buying, dividing, and subdividing, and issuing building permits and approving plans for lands located north of the city, with the total area lifted from suspension in Riyadh reaching 81 square kilometers.

Thu, 18 2025

The measures also included the Royal Commission for Riyadh providing planned and developed residential lands for citizens up to 40,000 plots annually at prices not exceeding 1,500 riyals per square meter.

This is in addition to the issuance of the new white land fee regulation, which included fees of up to 10% on some raw lands, along with a decision to freeze rental prices in the capital for five years.