Saudi Real Estate Prices Drop for First Time in 4 Years: Correction Start or \"Bottom\" Opportunity?

For the first time since 16 consecutive quarters of green ascent, a red flash appears on the Saudi real estate index screens. The news recently circulated by investors is not just a passing number, but a pivotal signal that may reshape ownership and investment strategies for 2026.

According to the latest data from the General Authority for Statistics (GASTAT), the real estate price index recorded a decrease of 0.7% during the fourth quarter of 2025. This slight decline on the surface carries deep implications regarding the impact of effective government policies to cool the market, and the abundance of supply that has finally begun to flow into Riyadh's neighborhoods and major cities.

In this analysis from Skyline Real Estate, we read for you what lies behind the numbers, and clarify for the investor and the home seeker: Are we living a moment of a "bubble burst" or are we facing a long-awaited "healthy correction"?

The Language of Numbers: What Happened in Q4 2025?

The residential sector led the decline train, where prices of residential lands, apartments, and villas fell by varying percentages, putting pressure on the general index to drop for the first time in 4 years. Although the percentage (0.7%) might seem negligible, the general trend is what matters most.

Detailed data indicates that the decline was mainly concentrated in:

• Residential Lands: Witnessed the largest decline, directly affected by the White Land fees.
• Riyadh Real Estate: The capital, which was boiling with price hikes, began to witness noticeable cooling, especially in neighborhoods that saw a large injection of supply.

Why Did Prices Drop Now? (The Three Drivers)

This decline was not surprising to professional observers; rather, it is the result of the combination of three main factors whose fruits ripened at the end of 2025:

1. "The White Hammer": The Impact of Land Fees

With the entry of new phases of White Land fees into force in Riyadh and Jeddah, and the raising of fees to 10% in some top-priority ranges, many owners of large lands were forced to either develop or sell. This pressure led to an increase in the supply of raw land, contributing to curbing prices that were inflating due to speculation.

2. The Flood of New Supply (The Impact of "Roshn" and the National Housing Company)

Over the past two years, we were talking about "off-plan" projects. Today, at the beginning of 2026, these plans have turned into tangible reality. The delivery of thousands of units in projects like "Sedra" and Al-Fursan District projects has started to create a real balance between supply and demand, reducing pressure on the secondary market.

This is what we expected previously when analyzing the leap in licenses, where we pointed out that the record rise in building permits in Saudi Arabia would inevitably lead to a price equilibrium point, which is what we see today.

3. Curbing Rents and Speculation

Recent regulatory decisions, including rent controls in the capital, contributed to reducing the appetite of investors who were buying real estate with the aim of renting it out for astronomical returns. When the rental frenzy calmed down, the sales price frenzy calmed down with it. For more on the background of this factor, you can review our previous analysis on the Riyadh rent freeze decision: Impact on Investors, Owners, and Tenants.

Is It a Collapse or a Healthy Correction?

It is very necessary here not to drift behind resonant headlines promoting a "real estate collapse." What is happening is a healthy and required correction. The Saudi economy is growing strongly, and real demand (End-user demand) remains very high thanks to population growth and the influx of residents and companies.

At Skyline Real Estate, we see that this decline serves the sustainability of the market in the long term, as it returns prices to levels that suit the purchasing power of the citizen and the real investor, rather than the speculator.

How to Act Now? A Roadmap for the Buyer and Investor

Based on the data of January 2026, here is our direct advice:

For the Buyer (First Home):

This is your golden opportunity to negotiate. The market has shifted slightly from a "seller's market" to a "balanced market."

• Do not rush to buy immediately if you do not find the ideal property, as time has become in your favor.
• Search in areas that witnessed a decline due to increased supply, especially North and East Riyadh.

For the Real Estate Investor:

• Stay away from quick speculation on lands, as it is the most affected category.
• Focus on "Quality" and "Location": Quality properties in neighborhoods served by major projects (such as the Sports Boulevard or near Metro stations) will maintain their value and grow.
• Utilize geospatial data to distinguish promising neighborhoods. For example, neighborhoods benefiting from afforestation and new infrastructure still retain their investment attractiveness, as we detailed in our article on the Green Riyadh Project - Economic Impact and Real Estate Opportunities.

Our Role at Skyline Real Estate

In light of this delicate shift in market trends, the investment decision becomes more sensitive. At Skyline Real Estate, we do not just display properties, but we offer you:

• Realistic Data Analysis: We identify for you the neighborhoods that have reached the price bottom and those that are still inflated.
• Negotiation Strategy: We help you utilize Q4 data to get the best possible price from developers or owners.
• Selection of Safe Assets: Directing your investment towards properties that generate real operating returns away from asset price fluctuations.

In conclusion, the Q4 decline is not a warning bell to exit, but an alert bell to enter smartly. The market is breathing, and he who knows when to buy during this "exhale" is the one who will achieve gains in the next cycle.

Are you thinking of seizing a real estate opportunity in Riyadh or Jeddah now? Contact us to get a consultation based on the latest market data.