The city recorded transaction values of SR3.4bn ($906m), a 49 per cent increase compared with the same period in 2024.
Transaction volumes also climbed by 38 per cent, underscoring both investor confidence and rising demand from end-users.
Saudi housing dominates
Nationwide, housing remained the key driver of the real estate market, accounting for around 63 per cent of the SR123.8bn ($32.96bn) total transaction value during H1 2025.
Residential transaction numbers rose by 7 per cent year-on-year to nearly 93,700, with a total value of SR77.5bn ($20.6bn).
This momentum was supported by increased mortgage activity, government schemes, and new housing delivery in major cities.
Faisal Durrani, Partner – Head of Research, MENA, Knight Frank, said: “One of the most significant legislative developments this year has been the approval of the new Law of Real Estate Ownership by Non-Saudis.
“Set to come into effect in January 2026, this new ownership framework, coupled with accelerating residential deliveries and mortgage market reforms, is expected to deepen market liquidity and improve investor sentiment.
“This comes at a time when key markets like Riyadh are starting to stabilise as we approach the government’s 70 per cent home ownership target and high house prices subdue demand to an extent.”
Riyadh market rebalances
After years of growth, Riyadh entered a recalibration phase in H1 2025. Transaction volumes fell 31 per cent year-on-year, with values easing 20 per cent to SR29bn ($7.71bn).
Despite the decline, prices continued to climb. Average apartment prices in Riyadh rose 10.6 per cent in Q2 2025 to SR 6,175 ($1,642) psm, with districts near the new Riyadh Metro showing the strongest gains.
Al Taawun recorded a 32 per cent rise to SR9,470 ($2,518) psm, while King Abdullah District values rose 17 per cent to SR 7,656 ($2,035) psm.
Villa prices also advanced, averaging SR5,470 ($1,456) psm, up 8.2 per cent year-on-year. Northern Riyadh remained the most expensive area for villas, at SR 8,660 ($2,306) psm.
Harmen De Jong, Regional Partner – Head of Consulting, MENA, Knight Frank, said: “Riyadh remains one of the Kingdom’s most dynamic markets, supported by ongoing Vision 2030 initiatives and major infrastructure investment.
“The implementation of the foreign ownership law next year will energise the market by boosting liquidity and enhancing the quality of developments. Together, these factors indicate that Riyadh’s current market adjustment is part of a broader and healthier evolution, positioning the city for more diversified and sustainable long-term growth.”
Jeddah gains momentum
In contrast, Jeddah continued to expand. Transaction volumes rose 19 per cent, while total values jumped 28 per cent to SR17.3bn ($4.6bn).
Average apartment prices climbed 2.7 per cent to SR4,324 ($1,150) psm, with central and western districts showing the strongest growth.
Villas rose 3.2 per cent to SR5,040 ($1,341) psm, led by northern districts.
Integrated, master-planned communities such as Roshn’s Al-Arous are attracting demand for their lifestyle focus and urban design, particularly in coastal areas.
Holy cities’ demand rising
In H1 2025, Madinah transaction values rose 49 per cent to SR3.4bn ($906m), with deal volumes up 38 per cent. Apartment prices grew 2.5 per cent to SR 3,835 ($1,020) psm, while villa prices dipped slightly to SR3,500 ($933) psm.
In Makkah, transaction values declined 33 per cent, but deal numbers increased 11 per cent, pointing to a shift toward smaller, more affordable units.
Average apartment prices eased 0.5 per cent to SR 3,650 ($973) psm, while villa prices inched up 0.4 per cent to SR3,420 ($913) psm.
Amar Hussain, Associate Partner – Research, Knight Frank, said: “Large-scale government-backed projects are transforming the urban fabric of Makkah and Madinah. In Makkah, the Masar Destination is creating new corridors and mixed-use zones that integrate residential, commercial and cultural spaces close to the Haram.
“And in Madinah, the Rua Al Madinah project will introduce new hotels, cultural landmarks and enhanced transit connectivity. These developments will elevate the cities’ urban experience, strengthening their appeal to both residents and visiting pilgrims while supporting the government’s broader tourism and economic development goals.”
