The slowdown observed by the official indicators of the Saudi real estate market during the first six months of this year did not come as a surprise to observers; rather, it came as a practical application of the 'rebalancing' phase that began to emerge since 2025. With the entry into force of major regulatory changes such as 'in-kind registration,' investors and real estate developers are currently going through a period of recalculation and conscious anticipation, ahead of a second half that experts expect to be driven by genuine demand in the residential and integrated logistics sectors.

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

Road network in the Saudi capital (SPA)

This decline in values was also paralleled by a decrease in the pace of trading activity: the number of real estate transactions fell to 161.9 thousand transactions compared to 220 thousand transactions in the first half of the previous year, a drop of 26.4 percent, reflecting a clear slowdown in buying and selling activity within the market. The decline was not limited to the value and number of transactions but extended to the volume of traded assets: the number of traded properties decreased from 204.9 thousand properties to 138.6 thousand properties, 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 drop 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 during the same period last year, recording a decline of 11.4 percent. The highest recorded price per square meter in transactions also dropped from SAR 453,124 to SAR 330,578, a decline of about 27 percent.

Aerial photo showing the city of Riyadh (Reuters)

Reading into the reasons for 'conscious anticipation'

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

Al-Faqih called for the necessity of distinguishing between traded and non-traded assets, noting that exchange indicators show many investors have converted their assets to the 'non-traded' category in a state of preferring anticipation and repositioning 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 in a phase of serious recalculation, especially with the government's explicit direction to develop the sector and correct practices within it. This direction will contribute to redirecting huge liquidity and injecting it into genuine development projects, and increasing housing supply.'

Decline in trading is not a price correction

From a complementary perspective, expert and real estate enthusiast Abdullah Al-Mousa, in his statement to Asharq Al-Awsat, agrees that the decline in trading values by more than 51 percent cannot be interpreted as a 'direct reflection of the same degree of price decline,' as reading the indicators requires greater depth. Al-Mousa notes that during the first half of 2026, the market witnessed a pivotal institutional transformation represented by the expansion of the application of 'in-kind registration' and the transfer of the execution of real estate dispositions in key areas - foremost among them the capital Riyadh - to the real estate registry system, a fundamental variable that must be taken into account when making annual comparisons.

Al-Mousa cited the market's resilience: the average price per square meter fell by only 11 percent compared to a drop in trading by more than half its value, confirming that the sector has not seen a sharp price correction but rather a change in the 'composition of transactions themselves,' as a result of a decline in huge billion-dollar deals and high-value assets, versus stable real estate prices in locations with genuine demand.

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

One of the projects of the 'National Housing Company' (SPA)

The second half of 2026

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

In conclusion of his analysis, Al-Mousa suggested that integrated residential projects that meet actual 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 not be measured by the volume and quantity of trading alone, but by its ability to attract qualitative investments, raise the efficiency of asset utilization, and achieve a sustainable balance between supply and demand.'