This Saudi city is outpacing Riyadh in property growth with home sales up 71%

Dubai: Dammam recorded the fastest residential property growth among Saudi Arabia’s main cities during the first quarter of 2026, with the value of home sales rising 71% in three months to SAR3.6 billion.

Around 2,900 homes were sold in the city between January and March, representing a 41% increase from the final quarter of 2025, when transactions were valued at SAR2.1 billion, according to Cavendish Maxwell.

Sales volumes were 25% higher than a year earlier, while the total value of transactions increased 48%. March was the busiest month of the quarter, with 1,265 residential sales completed despite regional tensions.

The rise in Dammam contrasted with more measured activity in Riyadh and Jeddah, where affordability pressures, financing costs and a period that included Ramadan and Eid affected transactions.

Tenants in Riyadh saw some relief during the first three months of the year, with apartment rents falling 2.8% compared with the previous quarter and villa rents declining 1.2%.

The reductions were partly linked to the rent freeze introduced in September and the delivery of new residential supply in the capital.

Rental costs remained higher than a year earlier, with apartment rents up nearly 6% and villa rents rising more than 5%, although quarterly declines indicated that the pace of growth had begun to ease.

Riyadh recorded 8,800 home sales worth SAR13.4 billion during the quarter. Transaction volumes increased nearly 12% from the final three months of 2025, while sales values rose more than 4%.

Activity remained considerably below the elevated levels recorded a year earlier, with sales volumes down 64% and values falling 72% compared with the first quarter of 2025.

Residential sales prices continued to rise annually across Riyadh, Jeddah and Dammam, although there was little movement from the previous quarter in most areas.

Apartment prices in Riyadh averaged SAR6,200 per square metre, up 3.7% from a year earlier. Villa prices rose nearly 7% to SAR5,700 per square metre, with both categories broadly unchanged from the fourth quarter.

Jeddah apartment prices increased nearly 2% annually and 1.3% during the quarter to SAR4,400 per square metre. Villa prices reached SAR5,200 per square metre, representing annual growth of 3.3% and a quarterly increase of 1%.

Dammam apartment prices rose 4% from a year earlier, while villa prices increased by more than 2%. Both remained close to their levels at the end of 2025.

Rental growth in Jeddah also eased during the quarter, although apartment rents remained 2.7% higher than a year earlier and villa rents were up nearly 1%.

Dammam apartment rents increased 3.2% annually, while villa rents rose 2.1%.

Residential sales in Jeddah fell 25% from the previous quarter and around 30% from a year earlier.

Investors and buyers completed 5,800 transactions worth SAR7.2 billion during the first three months of 2026.

“While the potential implications of the regional geopolitical situation remain closely monitored by market participants, it is still too early to draw definitive conclusions," said Kevin Duffield, Director of Built Asset Consulting at Cavendish Maxwell. "A clearer assessment will emerge as market performance is evaluated over a longer period. Saudi Arabia's residential market remains supported by strong domestic demand, with a predominantly local buyer base providing a degree of resilience against short-term external shocks.”

Riyadh added almost 3,000 homes during the first quarter, taking its residential inventory to around 1.94 million units.

Another 31,000 units are due before the end of 2026, followed by 61,500 units through the end of 2028. The capital’s total housing stock is expected to reach 2.03 million units by then.

Jeddah delivered 1,500 homes during the quarter, lifting its inventory to around 1.1 million units. A further 17,500 homes are scheduled for this year, with nearly 46,000 more expected over the following two years.

Dammam is expected to receive 4,800 new homes during 2026, taking its inventory to 435,000 units. Deliveries are scheduled to rise to 10,600 homes in 2027, followed by another 3,500 in 2028.

Duffield said, “Development pipelines are evolving across each city, with Riyadh seeing the most new supply in the medium term, and growth in Jeddah and Dammam more modest and measured. Collectively, this expanding pipeline is expected to play an increasing role in shaping market dynamics and gradually improving the balance between supply and demand.”

Saudi Arabia’s foreign property ownership law, introduced in January 2026, allows non-Saudi individuals and companies to invest in real estate within approved areas.

Designated locations in Riyadh include Qiddiya, New Murabba and King Abdullah Financial District, while more than 55 zones in Jeddah have been opened to foreign ownership.

NEOM, The Red Sea Project, Amaala, AlUla and King Abdullah Economic City are also covered by the framework. Separate rules apply in Makkah and Madinah, where ownership in designated zones is restricted to Muslim buyers.