The real estate price price index saw a 3.2% y-o-y increase in 2Q 2025, subdued by slow growth in the residential sector which offset big increases in commercial real estate prices, according to fresh data (pdf) from Gastat.

The breakdown: Residential real estate saw a modest 0.4% y-o-y increase in the second quarter, with land prices up 0.2%, villa prices increasing 3.2%, and floor prices up by 1.5%, while apartment prices decreased 0.7%.

Commercial real estate went the other way, logging an 11.7% y-o-y increase. Commercial land prices were up 12.6%, while buildings rose by 2.7%, and shop and gallery prices inched up 4.1%.

Riyadh is finally cooling off: Prices in the region inched up 3.6% y-o-y, the lowest growth level since 1Q 2022, down significantly from 10.7% in the first quarter of 2025. Tabuk led the regions with a 4.7% price increase, while the Eastern Province saw an annual growth of 4.2%. In contrast, prices fell by 3.2% in Madinah and by 3.9% in Aseer.

Reforms already paying off? The government recently introduced a battery of reforms to stimulate the real estate market. The changes allowed non-Saudis to own property and foreign investment in Makkah- and Madinah-based real estate companies, lifted development restrictions on 81 sq km of land in northern Riyadh, and saw amendments to the White Land Tax law, in addition to planning the release of 10k-40k affordable residential plots per year.

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