RIYADH: Saudi Arabia’s real estate sector remained resilient in the first quarter of 2026 despite regional tensions, supported by structural demand drivers, regulatory reforms and continued investor confidence, according to CBRE.
In its latest market review, the real estate consultancy said the Kingdom’s property sector recorded solid growth in the first quarter, with total transaction values reaching SR112 billion ($29.85 billion), up 6.8 percent from the same period a year earlier.
The report said the sector continues to benefit from Vision 2030 reforms, strong domestic demand and large-scale development activity tied to giga-projects, tourism expansion and infrastructure investments.
Bolstering the property market is a central pillar of Saudi Arabia’s economic diversification strategy as the Kingdom seeks to establish itself as a global tourism and business destination. The Real Estate General Authority expects the sector to reach $101.62 billion by 2029, with a projected compound annual growth rate of 8 percent from 2024.
Commenting on the sector’s growth trajectory, Joclaire Carrasco, co-founder and COO of Mirai Real Estate Consultancy & Advisory, said the market’s resilience reflects the cumulative impact of reforms introduced over the past decade.
Joclaire Carrasco, co-founder and COO of Mirai Real Estate Consultancy & Advisory. Supplied
“Vision 2030’s Regional Headquarters program has pulled hundreds of multinationals into Riyadh, creating recurring, salary-backed demand rather than speculative interest,” Carrasco told Arab News.
He added: “PIF deployment, a maturing mortgage market, and the expanded property registry have turned illiquid land banks into financeable assets. The SR112 billion figure reflects scaled transactions through formal channels.”
Carrasco noted that a young population pushing toward 70 percent homeownership, combined with Expo 2030, the AFC Asian Cup, and FIFA 2034, is creating demand catalysts extending well into the next decade.
Maurice Salem, partner at Arthur D. Little, said Saudi Arabia’s real estate sector is increasingly being driven by structural demand rather than oil-linked liquidity cycles.
“We see several reinforcing forces including: First, demographics: a young, urbanizing population, with Riyadh alone on track to move from roughly 7 million to a projected 9.6 million residents by 2030,” he said, adding that the Kingdom’s giga-project pipeline is converting long-term ambition into sustained construction and end-user demand.
Office sector
According to CBRE, Riyadh’s Grade A office market remained exceptionally tight during the first quarter, with occupancy levels hovering near 98 percent. The Regional Headquarters program continued to support demand, with more than 780 international firms now licensed and maintaining a physical presence in the capital.
Technology firms accounted for 53 percent of office demand, followed by professional and financial services. Approximately 0.56 million sq. meters of office supply is expected to be completed in 2026, with a further 0.90 million sq. meters scheduled for delivery between 2027 and 2028.
Prime rents have shown measured growth, and the market is absorbing new stock effectively while maintaining a structural shortage of top-tier space. Jeddah’s Grade A occupancy stands at 94 percent with stable rents, while Dammam’s premium segment holds steady at 91 percent.
Residential sector
The consultancy said the residential sector is undergoing a broader recalibration, with Riyadh rental rates softening 2.1 percent year on year in March 2026 following regulatory reforms introduced in late 2025.
Under new Real Estate General Authority regulations, rents for existing leases remain fixed at September 2025 levels, while new-to-market inventory must align with values recorded on the Ejar platform.
Annuj Goel, chairman of Golden Light Group, said that Saudi Arabia’s residential market is becoming far more lifestyle-led than volume-led.
Annuj Goel, chairman of Golden Light Group. Supplied
“Buyers today are asking sharper questions around maintenance quality, walkability, privacy, amenities and long-term community management. That is a major evolution because it signals a transition from transactional buying toward experience-based living,” he said.
Goel added: “There is also strong momentum in communities that integrate retail, wellness and public space into the residential environment. People want convenience built into daily life.”
Salem said Saudi Arabia’s homeownership rate has already reached 65 percent, with the government’s 70 percent target for 2030 appearing increasingly achievable.
“The Kingdom needs to absorb significant household formation — independent estimates suggest more than 300,000 additional homes are required for Saudi nationals between 2024 and 2034, with Riyadh alone projected to grow its population by close to 38 percent by 2030,” said Salem.
He added: “The next chapter is about quality and density: a shift from villa-dominant suburban expansion toward higher-density, walkable, mixed-use neighborhoods better aligned with how a young, urban Saudi population actually wants to live.”
Hospitality sector
The hospitality sector also posted strong performance during the quarter, with Saudi Arabia welcoming a record 37.2 million domestic and inbound tourists, generating SR82.7 billion in spending.
Domestic tourism accounted for 28.9 million travelers, marking a 16 percent year-on-year increase and contributing SR34.7 billion in spending.
Despite the strong tourism figures, the sector faced operational headwinds during the quarter. Riyadh’s hotel occupancy declined 13.5 percent on a year-to-date basis, while March occupancy dropped 15.6 percent compared with the same month last year.
“Hospitality real estate in Saudi Arabia is expanding beyond hotel inventory into destination creation,” said Goel.
He said the Kingdom is attracting a broader mix of travelers across culture, entertainment, sports, wellness, and business tourism, driving demand for more differentiated hospitality concepts and experiences.
Salem noted that Saudi Arabia is on track to nearly double its hotel inventory, with around 94,500 keys in the near-term pipeline and a target of 362,000 rooms by 2030, backed by approximately $110 billion in committed investments.
The Arthur D. Little official said “three demand engines are converging,” including religious tourism under the Kingdom’s Hajj and Umrah expansion plans, as well as leisure destinations such as the Red Sea, AlUla, and Diriyah, which are now operational and attracting global operators.
He added that event-driven demand from Expo 2030 and the 2034 FIFA World Cup would also accelerate growth, with the latter alone expected to require around 230,000 hotel rooms.
Foreign ownership law
Carrasco also described the rollout of the Law of Real Estate Ownership by Non-Saudis as a “watershed moment,” adding that the legislation was well designed.
According to him, channeling foreign capital into designated zones rather than opening the whole market attracts international investment without distorting local affordability.
“The UAE went through a comparable journey with freehold ownership, but Saudi Arabia benefits from regional precedent, so the framework is more mature on day one,” said Carrasco.
He added: “The biggest beneficiaries will be branded residences, giga-project zones, and institutional capital flowing through REITs. Products must be benchmarked against global standards, not just regional ones.”
Salem said the new law is one of the most consequential reforms in the Saudi market, but its real significance lies in how it has been designed.
“By confining foreign ownership to designated zones in Riyadh, Jeddah, and selected urban districts — while preserving safeguards in Makkah, Madinah, and core residential neighborhoods — the regulator has deliberately separated international capital from local affordability,” Salem concluded.
