Despite regional tensions, March 2026 saw the highest monthly sales in Dammam with 1,265 transactions
Dammam is driving growth in Saudi Arabia’s residential real estate sector, with quarterly sales values rising 71 percent to SAR3.6 billion ($957 million) in Q1 2026.
According to new insights from Cavendish Maxwell, around 2,900 homes were sold in Dammam from January to March this year, up 41 percent on Q4 2025, when sales values stood at SAR2.1 billion. Compared to Q1 last year, sales volumes in Dammam were 25 percent higher, with values up 48 percent.
“While the potential implications of the regional geopolitical situation remain closely monitored by market participants, it is still too early to draw definitive conclusions. A clearer assessment will emerge as market performance is evaluated over a longer period. Saudi Arabia’s residential market remains supported by strong domestic demand, with a predominantly local buyer base providing a degree of resilience against short-term external shocks,” said Kevin Duffield, Director of Built Asset Consulting at Cavendish Maxwell.
Dammam sales grow despite regional slowdown
Despite regional tensions, March 2026 saw the highest monthly sales in Dammam with 1,265 transactions, reinforcing the resilience of the housing sector in the city. Cavendish Maxwell’s latest analysis of Saudi Arabia’s residential real estate market also reveals a quarterly rise in transaction volumes and values in Riyadh, with 8,800 sales worth a total of SAR13.4 billion in Q1 2026, representing an increase of nearly 12 percent and more than 4 percent respectively against Q4 2025.
Year-on-year, Riyadh’s sales volumes were 64 percent lower compared to Q1 2025, with values down 72 percent, reflecting more balanced activity compared to elevated levels in late 2024 and early 2025. Higher financing costs, affordability constraints, Ramadan, Eid and regional uncertainty also affected Riyadh’s Q1 performance, according to the report.
Q1 activity also moderated in Jeddah, where sales declined 25 percent compared to Q4 2025 and around 30 percent year-on-year. Investors spent SAR7.2 billion across 5,800 transactions in the first three months of the year.
Sales prices and rental rates continue to increase
The Saudi Arabia report also shows that while real estate sales prices and rental rates in Riyadh, Jeddah and Dammam increased year-on-year, the pace of growth is beginning to moderate, with little or no change compared to Q4 2025.
In Riyadh, apartment sales prices averaged SAR6,200 per square meter in Q1, up 3.7 percent year-on-year, while villas climbed nearly 7 percent to SAR5,700 psm. Prices for both apartments and villas were broadly the same as the previous quarter.
In Jeddah, the cost of apartments rose nearly 2 percent year-on-year and 1.3 percent quarter-on-quarter to SAR4,400 psm, with villa prices reaching SAR5,200 psm – an annual increase of 3.3 percent and a quarterly rise of 1 percent. Meanwhile, in Dammam, year-on-year apartment prices rose 4 percent, with villas up more than 2 percent. Prices remained much the same as they were in Q4 2025.
Rental rates across KSA also rose compared to a year ago, but, as with sales prices, moderated in Q1 compared to the previous quarter. In Riyadh, apartment rents were up nearly 6 percent and villas more than 5 percent on last year, but, thanks partly to the rent freeze introduced last September, declined 2.8 percent and 1.2 percent, respectively, compared to Q4 2025. New residential supply in Riyadh has also tempered rental prices in the capital.
In Jeddah, apartment rents were up 2.7 percent and villas nearly 1 percent compared to Q1 2025, with a softening against the previous quarter. Over in the Eastern Province, rents in Damman rose 3.2 percent year-on-year for apartments and 2.1 percent for villas.
Riyadh to see the most new supply in the medium term
Riyadh delivered almost 3,000 new residential units in Q1 this year, taking the Saudi capital’s residential real estate stock to around 1.94 million. Another 31,000 units are due to come to the market by the end of the year, with an additional 61,500 by the end of 2028, by which time Riyadh’s total residential inventory will reach 2.03 million.
Jeddah now has around 1.1 million units following the delivery of 1,500 new homes in Q1. With 17,500 more in the pipeline this year and nearly 46,000 over the next two years, Jeddah’s residential stock is set to top 1.16 million by 2028.
In Dammam, 4,800 new homes are expected to be delivered in 2026, bringing the city’s inventory to 435,000. There will be an acceleration in residential handovers in 2027, when 10,600 units are scheduled for completion. Another 3,500 are slated for 2028.
“Development pipelines are evolving across each city, with Riyadh seeing the most new supply in the medium term, and growth in Jeddah and Dammam more modest and measured. Collectively, this expanding pipeline is expected to play an increasing role in shaping market dynamics and gradually improving the balance between supply and demand,” said Duffield.
“Overall, while short-term market activity is expected to remain influenced by affordability constraints, financing conditions and external uncertainty, the medium-term outlook for Saudi Arabia’s residential sector remains supported by population growth, sustained government investment, and ongoing economic diversification,” he added.
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Saudi Arabia introduces new foreign ownership law
Saudi Arabia’s new foreign ownership law, introduced in January 2026, allows non-Saudi individuals and companies to invest in the country’s real estate market.
“Recently approved geographical zones in which the new rules apply bring greater clarity on where investors can buy. The long-term impact on sales numbers and pricing will depend on the level of non-Saudi demand, the types of projects located within the designated areas, and how quickly the supporting regulatory framework is implemented over the next few years,” Kevin Duffieldsaid.
In Riyadh, designated locations for foreign ownership include new urban developments such as Qiddiya, New Murabba and King Abdullah Financial District, while Jeddah has more than 55 zones, including parts of the city center, open to non-Saudi investors.
Several other KSA giga-projects and Special Economic Zones, including NEOM, The Red Sea Project, Amaala, AlUla and King Abdullah Economic City, also fall within the approved framework. Separate regulations apply in the holy cities of Makkah and Madinah, where ownership within designated zones is restricted to Muslim buyers.