Saudi real estate is witnessing a radical transformation with the return of balance to the residential sector
Company issued "CBRE Middle East"the latest edition of its report on the real estate market in the Kingdom of Saudi Arabia for the fourth quarter of 2025, which highlights the radical shift in the Kingdom’s growth path as the economy moves from the stage of regulatory establishment to the stage of accelerated implementation.
The last quarter of 2025 witnessed a shift in direction towards an era more focused on implementation in the Saudi real estate market, as rationalization of projects and reorganization of their phases became clear, with government investments refocusing on Expo and other key drivers.
According to the report, actual GDP rose by 4.8% year-on-year in the third quarter of 2025, supported by strengthening oil activity and resilience The non-oil sector, while inflation continued to decline and net foreign direct investment rose by 34.5% during the same period.
Regulatory developments, in particular the finalization of the Foreign Property Law and the launch of the digital portal, played a role in "Saudi Arabia real estate"played an essential role in shaping market trends by directing external demand to specific high-growth areas while preserving the purchasing power of Saudi families.
These reforms created a more organized and future-ready investment environment. The capital markets in the Kingdom have also become more open to international participation, as the Saudi Stock Exchange welcomes all Residential Sector The performance of the residential sector has reflected a period of healthy rebalancing. The increase in the number of residential units delivered, especially in Riyadh, which is scheduled to receive about 70,000 units over the next two years, has slowed price growth and pushed the market towards greater stability. While transaction activities declined as interested parties assessed the implications of the new foreign ownership law framework. Jeddah continues to achieve outstanding performance, recording an increase in transaction volumes. Large-scale community development projects, including Al Fursan and key projects within the Roshan Group, enhance the sector’s long-term depth. Looking ahead, the introduction of the new foreign ownership law in January 2026 is expected to be a major catalyst for activity within designated residential investment communities. The retail sector has continued its transformation into a more experience and lifestyle oriented sector. Construction progress at major regional destinations, such as The Avenues Riyadh and Westfield Riyadh, underscores the national shift towards pedestrian-focused, mixed-use centers that combine luxury, entertainment, food and beverage and digital experiences. With mall rents stabilizing and point-of-sale data indicating strong performance in the F&B and e-commerce sectors, the sector is evolving into a diversified ecosystem that supports both physical and digital consumption. Saudi Arabia’s hospitality sector saw a less strong performance, as new supply impacted occupancy rates, but the broader tourism ecosystem continued to strengthen. Total tourism spending in the first half of 2025 amounted to 161.4 billion Saudi riyals, while major infrastructure achievements, including the full operation of the Red Sea International Airport and the opening of six flags in the city of Qiddiya, are expected to stimulate demand in emerging destinations. Luxury hospitality and brands remain key elements, as highlighted by Four Seasons and Trump International ads in Diriyah, along with luxury residential offerings in the Masar area in Makkah. The industrial and logistics real estate sector continues to be one of the strongest performing sectors in the Kingdom, supported by the rapid growth of e-commerce, smart logistics partnerships and the National Logistics Strategy that is attracting significant private investment. Industrial rents have continued to rise in Riyadh and Jeddah, while major agreements, such as the development of 2 million square meters of smart logistics assets in the Golden Triangle, are positioning the sector for continued expansion. Matthew Green, head of research for the MENA region, commented: "Saudi Arabia has now entered a pivotal phase in its transformational journey, as the foundations laid over recent years are translating into remarkable progress and significant economic impact." He added that "The combination of structural reforms, a disciplined financial strategy and unprecedented project execution creates a real estate environment that is not only large, but mature and resilient over the long term. As international capital flows deepen and the pace of implementation accelerates in the residential, commercial, retail, hospitality and industrial sectors, the Kingdom is cementing its position as one of the most attractive global markets in the coming decade.".Retail Sector
Hospitality
Industrial and logistics real estate
