Real estate prices return to growth in 2Q after two quarters of decline

The Real Estate Price Index is back up in 2Q 2026, rising 1.3% y-o-y and reversing the only two straight quarters of declines in the past five years, according to the latest report (pdf) from Gastat.

Riyadh prices climbed back in 2Q, up 4.2% y-o-y after a 4.4% dip in 1Q — a rebound that cuts against the government’s push to cool the capital’s housing costs via reforms like the White Land Tax and rent freezes.

A 20-point spread separated the fastest riser from the fastest faller. Al Jawf led the regional gains, up 10.4%, followed by the Northern Borders (up 4.6%) and Riyadh. Some regions, however, moved against the broader trend, with Hail seeing the steepest decline at 10.1%, followed by Qassim (down 5.4%), Madinah (down 4.5%), and Al Baha (down 2.8%).

By sector: Residential prices rose 2.6% y-o-y, though gains were uneven: residential land climbed 6.3%, apartments 1.1%, and floors 0.4%, while villa prices fell 9.7%. Agricultural prices rose 11.3%, driven entirely by an 11.3% increase in agricultural land. Commercial prices moved the other way, down 3.2% y-o-y. The sector carries a 25.4% weight in the index, so its slide blunted the headline increase. Commercial land fell 3.5% and buildings 0.6%, while showrooms and shops edged up 0.4%.

Prices rose faster on a quarterly basis, up 3% from 1Q 2026. Residential led with a 3.7% q-o-q gain on higher land and apartment prices, even as villas fell 2.1% and floors slipped 1.1%. Commercial prices rose 1% and agricultural prices rose 1.3%.

REMEMBER- The residential sector was going through a period of adjustment in 1Q, during which transaction values had dropped 4.5% y-o-y. High land costs and a cautious market had buyers walking away from large villas toward smaller, high-liquidity apartments in the SAR 300-500k range. Major cities including Riyadh are contending with supply constraints across several segments, especially corporate space.

Worth watching: The return to hostilities could deepen the “wait-and-see” stance among buyers, particularly with affordability still a barrier. As for the recently finalized foreign ownership rules and zones, meant to draw outside capital into Saudi property, foreign investors were expected to start deploying by September, Coldwell Banker Saudi Arabia CEO Youssef Khattar told us. It’s unclear how recent escalations affect that timeline.