Saudi home sales tumble 50% in Q1 2026, Knight Frank says

Saudi Arabia's residential real estate market hit a wall in the first three months of 2026. Transaction volumes dropped 50% year-on-year to 29,490 deals, Knight Frank said Friday. Total value fell even harder, down 57% to SAR 22 billion.

Riyadh bore the brunt. Volumes in the capital collapsed 82% compared with the same period a year earlier. Jeddah, the Dammam Metropolitan Area, Makkah and Madinah also recorded weaker activity, the consultancy reported.

Knight Frank pinned the slowdown on mounting affordability pressure and weakened mortgage demand. Negative sentiment tied to the regional conflict also weighed on buyers, it said.

Yet prices kept climbing. Apartment prices in Riyadh rose 6.3% year-on-year in Q1. Villa prices increased 4.9%. Jeddah apartments gained 2%, and Dammam Metropolitan Area apartments added 2.3%. The firm said those gains reflected resilience in January and February before the conflict's impact intensified, adding that the full effect has not yet shown up in the aggregate data.

Knight Frank named the National Housing Co. as the main driver of residential supply growth, through the development of integrated housing communities across the country.

Outside housing, Saudi Arabia's office market maintained strong fundamentals. Riyadh was the standout, driven by sustained occupier demand against a limited supply of high-quality institutional space. Major office developments under construction will enter the market over the next few years, giving tenants more choice and supporting the Kingdom's long-term growth objectives, Knight Frank said.