Riyadh’s housing market keeps climbing a year into gov’t cooling efforts

Riyadh’s housing market is still climbing a year into the Kingdom’s efforts to cool it. Real estate prices in the capital rose 4.6% y-o-y in 3Q 2026, accelerating from 4.2% in 2Q, even as the national Real Estate Price Index rose a more modest 1.2% y-o-y, according to Gastat’s latest report (pdf).

REMEMBER- The government imposed a five-year freeze on Riyadh rent increases in September 2025, and the White Land Tax was overhauled with rates of up to 10% of land value on undeveloped plots, alongside a new annual levy on vacant buildings, to push idle land into development and widen supply.

Land is where the pressure still sits: Nationally, residential land prices rose 4.9% y-oy — the fastest-moving component in the index — with apartments up 1.7% and villa prices down 7.7%. Residential prices rose 2.3% overall. Agricultural prices rose 3.9%, effectively all of it in agricultural land, also up 3.9%, while commercial prices fell 2.0%, with land off 2.1% and buildings 1.4%.

The quarterly read goes in the opposite direction: The index fell 1.2% q-o-q, with residential down 1.5% on land prices off 2.1% and apartments down 0.5%, while villas slipped 0.4%. Commercial prices fell 0.3%, while agricultural prices rose 0.2%.

Outside the capital, the gains are narrow: Northern Borders stands well clear of everywhere else at 12% y-o-y, and nine regions recorded declines, with Asir the steepest at 4.3%, followed by Hail at 3.8% and the Eastern Province at 3.7%.

REMEMBER- Foreign investors have been expressing a strong appetite for the real estate market in Riyadh and the holy cities. Indonesia’s Danantara is committing more than SAR 6 bn to Makkah, while Alramz Real Estate’s Masar Corner project in the city drew SAR 670 mn in preliminary off-plan reservations. Meanwhile, international firms are capitalizing on the capital’s flexible offices, with more than 780 multinational firms now operating headquarters in the capital.