Saudi Arabia’s fastest-growing property market isn’t Riyadh, new report finds

Dubai: Dammam has emerged as Saudi Arabia's hottest property market in Q3, posting record 3,000 transactions worth SAR3.2 billion, up 60% year-on-year and 37% from Q2. The Eastern Province city attracts end users and investors with more affordable prices amid affordability strains in Riyadh and Jeddah.

Riyadh still dominates values at SAR17.6 billion from 13,000 deals, up 19% quarterly, though down 44% annually. Jeddah logged 7,500 transactions for SAR8.7 billion, gaining 10% in volume and 9% in value from Q2 but off 19% year-on-year.

Dammam apartment prices rose 5.8% and villas 3.2% year-on-year. Rents climbed 4.8% for apartments and 2.2% for villas. Its debut in Cavendish Maxwell's KSA report highlights surging demand where affordability trumps capital price hikes.

“Riyadh’s rapid price appreciation in 2024 led to sharp increases in both sales and rental prices, prompting the Government to introduce a five-year rent freeze to address affordability concerns,” said Sean Heckford, Director of Built Asset Consulting at Cavendish Maxwell. “In Jeddah, price conditions have stabilised and affordability pressures have eased slightly. Meanwhile Dammam, where property is more affordable, is emerging as a new hot spot for property investment, with a year-on-year surge in buying activity from both end-users and investors.”

Riyadh apartment prices hit SAR6,160 per square meter, up 7.5% annually, villas SAR5,500 with 10.1% gains. Rents jumped 11.8% for apartments and 10.7% for villas. The city delivered 10,000 units in nine months plus 6,000 in Q4, with 57,000 more slated for 2026-2027.

Jeddah apartments reached SAR4,360 per square meter, up 1.6%, villas SAR5,140 gaining 3.1%, though villa rents fell 2.1%.

The three cities added 13,500 homes through nine months, targeting 22,800 by year-end. Riyadh plans 16,000 full-year, Jeddah 5,000 and Dammam 1,800, followed by 105,000 over two years including Jeddah's 36,000 and Dammam's 12,000.

Foreign ownership from January 2026 and White Land Tax will spur activity. Riyadh's rent freeze aids buyers but may curb landlord investment.

“Saudi Arabia’s Q3 residential market performance reflects a transitional phase marked by strong macroeconomic fundamentals and evolving regulatory measures,” Heckford added. “Despite affordability challenges in Riyadh, demand remains resilient, supported by the new laws and tax systems. Jeddah demonstrates stability with balanced supply and demand dynamics, and Dammam stands out as a growth hotspot driven by affordability and investor interest. Vision 2030 initiatives and infrastructure investments will be pivotal in sustaining momentum and unlocking new investment opportunities across all major cities in KSA.”