Saudi real estate market remains resilient despite slower sales: CBRE
The office sector remained the Kingdom’s strongest-performing asset class, particularly in Riyadh, where demand for Grade A office space continues to outstrip supply
03 August, 2026
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Saudi Arabia’s real estate market continued to demonstrate resilience in the second quarter of 2026, underpinned by robust non-oil economic growth, regulatory reforms and one of the world’s largest development pipelines, despite moderating residential sales activity and ongoing global uncertainty, according to CBRE.
In its latest Saudi Arabia Real Estate Market Review, the consultancy said the Kingdom is entering a new phase of its property cycle where project delivery, occupancy and investment performance are becoming increasingly important alongside the scale of new developments.
The report said non-oil economic activity expanded 2.9 per cent year-on-year in the first quarter of 2026, helping drive overall GDP growth of 3 per cent, while continued government capital expenditure supported the rollout of giga-projects, transport infrastructure, tourism developments and large-scale real estate schemes across the Kingdom.
Construction and procurement activity remained strong during the quarter, with major project awards recorded in Riyadh, Makkah, Madinah, the Eastern Province and Aseer. Government-backed developers including the National Housing Company (NHC), Diriyah Company, Expo 2030 Riyadh Company and Rua Al Madinah Holding continued to drive investment activity.
The office sector remained the Kingdom’s strongest-performing asset class, particularly in Riyadh, where demand for Grade A office space continues to outstrip supply. Driven by multinational companies establishing regional headquarters under Saudi Arabia’s Regional Headquarters (RHQ) programme, alongside expansion by technology, healthcare, financial services and consulting firms, Riyadh’s office stock has now surpassed 6 million square metres of gross leasable area, with occupancy across prime assets remaining close to full capacity.
Saudi Arabia’s residential market recorded a moderation in transaction activity during the quarter. Residential sales volumes across apartments, villas and land plots declined 14 per cent year-on-year to more than 41,000 transactions, while transaction values fell 27 per cent to almost SAR38bn.
Despite the slowdown in activity, residential prices continued to rise. The National Residential Price Index increased 2.6 per cent year-on-year, supported by sustained end-user demand and limited land availability in key urban centres. The quarter also marked the implementation of regulations under the Law on Non-Saudi Ownership of Real Estate, opening designated areas of the Kingdom to greater international investment.
The report also highlighted the continued expansion of master-planned housing developments, including the delivery of more than 5,500 homes at NHC’s Murcia project in Riyadh by the end of 2026.
Retail market fundamentals also remained healthy as consumer spending continued to grow. According to Saudi Central Bank data, point-of-sale spending increased from SAR58.4bn in April to SAR63.1bn in May, supported by a record 1.1 billion transactions. Approximately 400,000 square metres of new retail space is expected to be completed by the end of 2026, while vacancy rates remain around 6 per cent and prime rents in leading super-regional malls have held steady at around SAR3,275 per square metre.
Saudi Arabia’s hospitality sector experienced softer trading conditions during the first half of the year amid weaker corporate travel demand and regional geopolitical uncertainty. However, CBRE said the long-term outlook remains positive, supported by domestic tourism growth, international visitor targets under Vision 2030 and a substantial hotel development pipeline. Hotel inventory reached approximately 177,000 keys by the end of the second quarter, with significant new supply planned across Riyadh, Jeddah, Makkah, Madinah and the Red Sea coast.
Meanwhile, the industrial and logistics sector continued to benefit from Saudi Arabia’s economic diversification strategy, with demand for modern warehousing remaining strong due to manufacturing localisation, expanding e-commerce activity and ongoing investment in ports, rail and logistics corridors. Rental growth across key logistics hubs in Riyadh and Jeddah remained robust during the quarter as high-quality warehouse space continued to face tight supply.

Matthew Green, head of research at CBRE MENA, said: “What is increasingly evident across Saudi Arabia is the scale of execution taking place on the ground. From major infrastructure projects and commercial developments to new residential communities and tourism destinations, investment is increasingly translating into delivery. Supported by a growing non-oil economy and progressive regulatory reforms, including the introduction of the new non-Saudi property ownership framework, Saudi Arabia is continuing to strengthen its position as one of the most compelling real estate investment destinations globally. The market is now transitioning into a new phase, where delivery, occupancy and investment performance are becoming just as important as the scale of the development pipeline.”





















