Saudi housing markets diverge in 1Q as Riyadh slows, Dammam grows

The residential markets are splitting into two. Riyadh’s housing boom cooled in 1Q 2026, while Dammam’s rise accelerated, according to a Cavendish Maxwell report.

The breakdown: Riyadh logged some 8.8k residential sales in 1Q, down 64.4% y-o-y and worth SAR 13.4 bn, a 72.5% drop by value. Cavendish Maxwell reads the fall as a normalization from elevated activity in late 2024 and early 2025. Dammam ran the other way with some 2.9k transactions, up 24.7% y-o-y and worth SAR 3.6 bn, a 47.6% rise by value.

On a quarterly basis, the same pattern but softer: Dammam led, with volumes up 41.4% q-o-q and transaction value up 70.7%. Riyadh recovered more modestly at 11.6% q-o-q on volume and 4.3% on value.

Prices are diverging too: Riyadh apartment prices averaged c. SAR 6.2k per sqm, up 3.7% y-o-y but down 0.4% q-o-q. That quarterly dip points to weakening price momentum in the capital. Villas held at c. SAR 5.7k per sqm, up 6.9% y-o-y and flat over the quarter. Dammam kept climbing on both counts: apartments up 4.1% y-o-y, villas up 2.2%, each edging higher q-o-q.

Jeddah sat in between: Transactions came in at c. 5.8k, down 31.5% y-o-y, and were worth SAR 7.2 bn, a 30.5% drop by value. But prices held: apartments up 1.9% y-o-y, villas up 3.3%, both still rising over the quarter even as volumes fell.

Two variables shape the rest of 2026

The first is supply: A pipeline is arriving in Riyadh just as demand cools. The capital's residential stock reached c. 1.94 mn units, with 31k more expected by end-2026 and a further 24.5k and 37k in 2027 and 2028. Cavendish Maxwell expects that wave, supported by the expanded White Land Tax pushing underutilized plots into development, to put modest downward pressure on Riyadh prices through the year. Dammam's pipeline is far smaller: c. 4.8k units in 2026 against a 430k-unit base.

The second is foreign demand: Saudi Arabia’s geographic zones where non-Saudis can buy are now live, covering Qiddiya, New Murabba, and Kafd in Riyadh, more than 55 areas in Jeddah, and giga-projects including Neom, the Red Sea Project, and King Abdullah Economic City. Cavendish Maxwell says the effect on volumes and pricing depends on how much non-Saudi demand materializes and how quickly the framework translates into transactions.